Vol. 1049 No. 3
5. Deputy Cathal Crowe asked the Minister for Enterprise, Trade and Employment how many businesses in Clare are likely to qualify for the increased cost of business grant; what discussions his Department has had with Clare County Council in relation to this; and if he will make a statement on the matter. [5563/24]
17. Deputy Aengus Ó Snodaigh asked the Minister for Enterprise, Trade and Employment when is the rollout of the increased cost of business scheme going to happen and will he elaborate on the mechanics of the scheme; whether it has sufficient funding to address the crisis in small businesses and prevent a further raft of closures, especially among the hospitality businesses such as cafés and pubs; and if he will make a statement on the matter. [5439/24]
20. Deputy Brian Stanley asked the Minister for Enterprise, Trade and Employment for details of the increased costs of business grants announced in the budget; the amount per grant and when the scheme will begin. [5280/24]
21. Deputy Louise O'Reilly asked the Minister for Enterprise, Trade and Employment when the increased cost of business scheme will be rolled out to business. [5572/24]
22. Deputy Pádraig O'Sullivan asked the Minister for Enterprise, Trade and Employment when the increased cost of business scheme will be activated as part of budget 2024; and if he will make a statement on the matter. [5546/24]
25. Deputy Brian Leddin asked the Minister for Enterprise, Trade and Employment to outline supports for the SME sector, particularly enterprises with less than ten employees, to assist with escalating operating costs; and if he will make a statement on the matter. [5756/24]
26. Deputy Jennifer Murnane O'Connor asked the Minister for Enterprise, Trade and Employment the number of Carlow businesses that are likely to qualify for the increased cost of business grant; the discussions his Department has had with Carlow County Council in relation to this; and if he will make a statement on the matter. [5509/24]
32. Deputy Jackie Cahill asked the Minister for Enterprise, Trade and Employment how many businesses in Tipperary are likely to qualify for the increased cost of business grant; what discussions his Department has had with Tipperary County Council in relation to this; and if he will make a statement on the matter. [5565/24]
38. Deputy James Lawless asked the Minister for Enterprise, Trade and Employment the number of Kildare businesses that are likely to qualify for the increased cost of business (ICOB) grant; the discussions his Department has had with Kildare County Council in relation to this; and if he will make a statement on the matter. [5511/24]
I thank the Minister for taking the questions. On budget day, the Minister announced that a €257 million pot is being made available for an increased cost of business grant scheme. I would like to know how many Clare businesses he expects to be able to avail of the scheme and, additionally, what engagement he and his departmental officials have had with Clare County Council in advance of this scheme being launched.
I propose to take Questions Nos. 5, 17, 20 to 22, inclusive, 25, 26, 32 and 38 together.
To give a direct answer on Clare, we think that 3,955 businesses will potentially benefit. I will now answer the question more broadly because other Deputies have questions in this regard.
The increased cost of business grant, announced in budget 2024, is intended to benefit particularly small and medium sized businesses operating from a rateable premises. The grant is intended to aid firms that have been affected by rising costs but is not intended to compensate directly for all increases in wages or other costs for every business. The total allocation for the grant is €257 million.
Officials within my Department are leading the introduction of this scheme, working in conjunction with the local authorities, the Local Government Management Agency, LGMA, the County and City Management Association, CCMA, and the Department of Housing, Local Government, and Heritage. A service level agreement is currently being drafted between my Department and the local authorities to underpin the operation of the scheme. This SLA will cover the delivery, funding and oversight arrangements for the grant scheme.
The administration of the grant will be carried out by local authorities with a view to providing relief in the first quarter of this year. Businesses will be contacted directly by their local authority. The grant has been set up in this way to ensure that the scheme is accessible to smaller businesses, which may have had difficulties availing of previous schemes because of form filling and bureaucracy. There is no intention to limit the scheme in any way related to employee numbers. A business must, at a minimum, meet the following eligibility conditions: it is a commercially trading business operating directly within a premises that is commercially rateable by a local authority; it has provided confirmation of its bank details to the respective local authority; it is rates compliant, including those businesses with a phased payment arrangement in place; and it is tax compliant and in possession of a valid tax registration number.
Data analysis was undertaken by my officials, based on data provided by Tailte Éireann, to estimate the number of potentially eligible businesses. With regard to each local authority, this analysis estimated that up to 3,955 premises in County Clare, 1,909 premises in County Carlow, 5,161 premises in County Tipperary and 4,639 premises in County Kildare could be eligible for the grant, and I can give figures for any county as Deputies wish. However, the final number of qualifying premises may differ as exclusions for vacant premises, non-rates compliant and non-tax compliant businesses are considered.
In relation to further supports for the SME sector, the local enterprise offices provide productivity and competitiveness supports to small businesses to cover lean, green and digital concerns. These include the trading online voucher, green for business and the energy efficiency grant. The “All in a Day's Work” national campaign also emphasises the benefits of these supports for businesses, namely, saving time, energy and money.
In short, what we are hoping is that businesses will get letters by the middle of February, or in and around that timeline. This is a busy time of year for local authorities, particularly their rates offices, but we certainly want to get those letters out. The letters are essentially to confirm with the business that it is still trading and that its bank account details are correct. Then, by the end of the first quarter, we want to have payments going out to businesses right across the country. There are over 140,000 businesses that we think will be eligible for the scheme, so it is a significant job for local authorities to get that funding out.
This is grant aid, not a rates rebate. We have simply calculated the grant on the basis of what businesses paid in rates last year, so any business that paid rates of between €10,000 and €30,000 last year will get a grant of €5,000 under this scheme, and there are about 15,000 businesses in that category. The other businesses paid rates of up to €10,000 and whatever they paid in rates last year, they will get grant aid of 50% of that amount this year, hopefully before the end of the first quarter, through the local authority SLA that we have in place.
I thank the Minister for the reply. It is a good scheme and I am glad that 3,955 Clare businesses will benefit.
The whole way of calculating and working out who will get what needs a little more thought, because this is based on the square footage of the floor space. It is based on the rate space. I found during the Covid period that there was real agility in the Government in identifying what businesses were suffering most and how best to support them. A model like that could be looked at once more. A rate space is just a matter of how much floor space a business takes up, but there are other metrics. I think the Revenue Commissioners could help in that regard.
I recently met with RGDATA, which represents many small- and medium-sized enterprises and retailers. They told me that the increase in cost per employee has been €4,200 per annum for business owners. I recently met with the owner of a very small supermarket in Clare. They have 15 employees. They have additional costs each year of €60,000 owing to the increased national minimum wage, the additional bank holiday, the additional statutory sick leave and auto-enrolment. It is crippling them. I think we need a little more than this scheme to ensure these businesses stay afloat.
I refer to everybody who is struggling and has been crippled by the huge increases in costs for small businesses, including staff costs, energy costs and professional costs. The Minister mentioned the rates. There are also higher maintenance costs and higher entertainment costs for small, non-chain pubs. There needs to be a look at the rates. The Minister is correct that €5,000 would be welcomed by any small business that is struggling. Yet, for many of those businesses, this will not ensure they will be open this time next year. One of the issues in Dublin, for instance, is that a huge portion of the property tax goes outside the city. That needs to be looked at. This means that Dubliners and Dublin businesses are not benefiting from the rates they pay. That needs to be looked at to ensure that rates are paid, or at least that they come down to address some of the problems. That is one of the big bugbears of small companies. The Minister needs to look beyond this one-off grant.
The Minister referenced the service level agreements. In his response can he indicate when that is sought to be finalised? He referenced that discussions were ongoing.
I welcome the acknowledgement from the Minister that the previous schemes - I assume he was referring to TBESS - were not taken up because of form-filling, bureaucracy and costs. I had heard the suggestion that small- and medium-sized enterprises were somehow part of some group scheme, etc., and did not need the money. It was money that they very much needed. I have already expressed my view on the return of €1.1 billion to the Exchequer. I think that money would and could have been drawn down had the processes been simpler or had more assistance been made available to people.
From the figures the Minister provided, €75 million from the sum of €257 million will go to larger premises. I assume the balance will go to the 135,000 other businesses. This will be what is left in the pot when the €75 million for the larger ratepayers is taken out. It will be split among the approximately 135,000 that are left.
I welcome the Minister’s response. There was a fair bit of detail in it. We woke up to news this morning that there has been 2.2% growth and 3.8% growth has been forecast for the economy for next year, which is obviously very welcome. Yet, all of us in this Chamber will know, including the Minister and Ministers of State, that many small businesses in particular are at the pin of their collars when it comes to the costs of running their businesses. The Minister has a list of figures before him. I would appreciate it if in his response he could mention the figures for Cork city and Cork county-----
Yes.
-----and the businesses there that will be eligible for this scheme. Can he give people a realistic target for when we hope to have the money going into their accounts? Timing will be crucial in this. We are again waking up to headlines that state that two businesses are closing per day. Timing is therefore crucial for many small businesses. If we could expedite the process as quickly as possible, that would be very welcome.
I would like to ask about the number of Carlow businesses that are likely to qualify for the increased cost of business grants. As the Minister will know, and as previous speakers have said, small businesses are very heavily impacted by payroll, taxes, the higher minimum wage, PRSI, paid sick leave and now the new deposit scheme. This tax is an issue that has been raised with me a lot recently.
Businesses are under pressure and there is no doubt about that. I have seen a few recently closing in my own area in Carlow. Other companies have said to me that the warehoused taxes that will be due could have a huge impact on them as well. While I appreciate the work that has been done, I ask the Minister about the commercial rates system, which has been used to identify qualifying businesses. The key payment under the scheme is to be structured as a grant and not as a rates rebate. Therefore, what engagement has occurred with Carlow County Council so they can absorb the loss in any rates?
There were a lot of questions there and I will go through them. First, I refer to the Deputies who have raised their areas. From a Cork perspective, in Cork County Council, we expect that 15,718 businesses may be eligible. In Cork City Council, the figure is 6,857. Therefore, across Cork city and county, there are approximately 23,000 businesses that may be eligible. These are not small numbers. In Dublin City Council the number is 17,558; in Dún Laoghaire-Rathdown County Council it is 4,409; and in Fingal County Council it is 5,481. In Carlow, the figure is 1,909.
Approximately 96% of rate-paying businesses, or virtually all of them, are eligible for this scheme. The ones that are not eligible, of course, are larger businesses that are paying much larger rates, such as large retailers, large manufacturing facilities, etc., that may be paying rates of €40,000, €50,000, €60,000 or €100,000. Of course, very big businesses are paying much more than that. The idea here was to find a mechanism to get cash to businesses because we knew they would be under some pressure in the first quarter of this year as they are adapting to policy and other factors that have been increasing the cost of running their businesses. We wanted to acknowledge that as a Government, and to help them with cash flow. We wanted to concentrate on small- and medium-sized businesses.
We know that the experience of TBESS and other schemes is that when there is a lot of form-filling and bureaucracy, many of the smallest businesses will not get involved. This is because they would need to take on an accountant to do it and they would need to interact with the Revenue Commissioners to do it, etc. For all sorts of reasons, they are not inclined to respond. Having said that, there were 50,000 applications under TBESS. We spent close to €150 million in taxpayers’ money helping businesses with their energy bills. It was not a small contribution.
However, this is significantly more than that. This is more than €250 million. For some businesses, this will be a relatively small amount of money. We used the rates base because it was one of the few datasets that we knew we could access quickly. We could work with local authorities to effectively get money out to businesses without them having to apply or fill out forms at all. They only have to confirm that they are an operating business, they are tax compliant and they are rates compliant in terms of having an arrangement with local authorities. It was therefore a quick way of getting a lot of money out to a lot of businesses in a relatively short space of time. This is not an easy thing to do - trust me - but that is what we have done.
I will acknowledge that for many businesses, particularly in the areas of food retail and other forms of retail, there has been a combination of an increase in the minimum wage, the extension of statutory sick leave, planning for future auto-enrolment, a VAT increase since the last budget, particularly for the hospitality sector, parental leave, energy costs and supply chain costs. All these things together are making it very difficult for businesses in some sectors to make margins at the moment. We are looking at what we can do beyond this support to help those businesses.
The Minister, Deputy Michael McGrath-----
I thank the Minister.
I will finish on this. Sorry.
The Minister will get a chance to come back in. He will have time afterwards. I will now go back to the speakers, beginning with an Teachta Cathal Crowe.
I thank the Minister for his response. He has listed some of the additional challenges and costs these businesses are facing. I would like to highlight one of them. Just last week, we all saw supermarkets unveiling new bottle and tin can recycling machines.
They cost €15,000 apiece but there is no Government support for that. They have all had to go down this route. There is a whole lot more that can be done for these businesses. Many are on the brink. Since 2019 our local shop and local pub in our village have closed. That is it. There is no more. That is our village gone. We are left with just a church, a school and a GAA field. That is so typical in many Irish communities. My worry is that this grant, while very welcome, and businesses will be glad to get it, will not be enough, given the rising costs they are facing. A sum of €4,200 per employee per annum is a hell of a lot of money, especially if one is employing 12 or 15 people in a village. Again, I do not think the rates base is enough. We used other metrics during Covid to drive supports to businesses. The rates base just reflects the floor space a business occupies but there is a lot more that we could consider.
It is good that the Minister acknowledges the huge costs being faced by small retail businesses, especially cafés and similar. Some of these costs have hit them quite suddenly and while they can plan for some, many small businesses are only surviving at this stage because the owner is not taking a full wage or has a second job. As Deputy Crowe just mentioned, in small villages owners have a loyalty to their community and they try hard to stay open. They need to know that there is an intervention coming down the track and while this one is welcome, they need to know that the Government will go beyond this. They also need to know that now so they can plan for the future because they cannot keep stretching the money that is coming into their businesses. Otherwise, they will have to shut up shop.
Just over 10% of the TBESS money was actually drawn down. I am not suggesting for a moment that it is an insignificant sum but there was a massive miscalculation on the part of the Government, either for the appetite for the scheme - I would contend that the appetite was most definitely there - or the capacity for small to medium enterprises to actually engage with the scheme. The Department returned €1.1 billion to the Exchequer. This was money that the Department negotiated, set aside and thought would be used, but then it was not used. It is welcome that the Minister has recognised the reasons for that but there is no denying that a drawdown of just over 10% is really not good enough.
Regarding the current scheme, €75 million will be taken out for the larger ratepayers. Based on the figures the Minister quoted, that leaves an average of €1,300 for the remaining business, assuming everyone gets the same amount. I appreciate that averages do not tell us everything but does the Minister anticipate that those businesses that qualify in the remainder category, that is, not the larger ratepayers, will receive around €1,300? When will the money be delivered? I know the Department is in talks about the service-level agreement and so forth but if he could give us a timeline on when the money will actually hit people's bank accounts, that would be appreciated.
I would like to reiterate a lot of what has been said by Deputies Crowe and Murnane O'Connor regarding the challenges. It is good to see that the Minister is also considering additional measures over the coming months to help businesses to meet those challenges. I agree with Deputy O'Reilly in relation to the timing. I have used my Dáil speaking time over the last couple of weeks, particularly in engagements with the Ministers of State, Deputies Richmond and Calleary, to stress the importance of timing here. I would hope that we can shave weeks off the processing time. I acknowledge that, in the case of Cork for example, processing 22,000 businesses is no mean feat. It is quite a big challenge for any local authority to undertake but shaving days, and hopefully weeks, off that processing time could make a really big difference to the various businesses. Again, I stress the urgency of this.
I also welcome the Minister's full support, particularly for the smaller businesses that are feeling all of the extra costs. In rural Ireland and in small towns and villages in counties Carlow and Kilkenny and other areas, small family businesses are part of the community and the environment. They play such a huge part and we do not want to see them closing. We want to keep all of our small businesses open. The Minister said he now realises that smaller businesses are under so much pressure. I know that he will consider funding mechanisms that will support them and keep them open. As the Minister of State, Deputy Calleary, is here I would like to refer to the most beautiful IDA business park in Carlow town which was built in the last year or two. Given that promoting businesses and getting investment into our rural towns and villages is so important, is there any update on the IDA park in Carlow town?
We will have one update from the Minister on this question.
I will leave that last question to Deputy Calleary, seeing as he was specifically asked about it.
It is for both Ministers.
We are very reliant on the local authorities to get this payment out as quickly as possible. They have been hugely helpful. The CCMA and the LGMA have been very helpful. This was a big ask of them with very little notice, in truth. We put this scheme in place at budget time. It involved a lot of money going out to a lot of businesses in a relatively short space of time and it became very clear that we could not do it before the end of the year, which we would have liked to do. What the local authorities and the Department of housing, which has also been very helpful, have said is that they would endeavour to get it out in the first quarter of this year and that is still the target. However, there are lots of moving parts involved in making that happen which is why we are putting a service level agreement in place. That will be finalised shortly. My understanding is that letters should go out by the middle of February confirming bank account details and active businesses with a view to getting payments out before the end of the first quarter, or at least a lot of the payments, and if there are any further payments outstanding, they will be made very shortly after that. We are trying to get these payments done in the first quarter of this year for all the reasons that Deputies have rightly outlined, including the pressure that many businesses, particularly those in specific sectors like cafés and restaurants, are feeling at the moment. I have met a lot of business owners over the last number of weeks, as have the Ministers of State in this Department.
More generally, I do not think we should be questioning some of the policy decisions that are resulting in increased costs to businesses. Is anybody suggesting that we should backtrack on the increase in the minimum wage to €12.70? Is anybody seriously suggesting that we should not go from three to five days statutory sick pay, when we are actually only catching up with other countries around Europe? Is anyone suggesting that we should not plan for auto-enrolment in terms of pension provision for the future? Is anybody considering that we should go backwards in terms of parental leave? All of these things are the right things to do but there is a cost to employers as a result of them and we need to respond to that, from a policy point of view. The Minister for Finance, Michael McGrath, has been hugely helpful in this regard in the context of working with Revenue. We are now going to treat warehoused debt with a lot more flexibility and with zero interest. This will enable businesses to manage that debt out into the future. My Department is considering what else it can do to assist businesses that are under pressure from a cost base point of view to remain competitive and to stay afloat this year.
6. Deputy Alan Farrell asked the Minister for Enterprise, Trade and Employment to detail his Department’s plans to support the SME sector in Ireland in 2024. [5299/24]
9. Deputy Jackie Cahill asked the Minister for Enterprise, Trade and Employment what measures he is taking to support the SME sector; and if he will make a statement on the matter. [5566/24]
35. Deputy Bernard J. Durkan asked the Minister for Enterprise, Trade and Employment the current strategy in place to assistance small businesses; whether any further initiatives are contemplated in this regard in 2024; and if he will make a statement on the matter. [5675/24]
My question relates to the Department's plans to support the SME sector in Ireland, for the very reasons that the Minister outlined in his response to the previous group of questions. There are significant increases in costs associated, in particular, with businesses in the hospitality and food sectors which have been contacting me in increasing numbers in recent weeks. The Minister has already set out a great amount of information in the House this morning and I cannot help but feel that this question should have been included in the previous grouping. That being said, it would be helpful if the Minister provided a further response.
We can have another go at it, perhaps with a slightly different slant, because it is a good question. I propose to take Questions Nos 6, 9 and 35 together.
I assure the Deputy that the Government is committed to backing business and will continue to work closely with SMEs nationwide by supporting their growth, helping them to find new markets and stimulating job creation. I know that at present SMEs in certain sectors are facing several challenges due, in particular, to rising energy costs, inflation, a tight labour market as well as measures which are aimed at improving working conditions. While I am acutely aware of the pressures facing SMEs in Ireland, it is worth mentioning that the most recent and forthcoming changes to improve working conditions are a necessary step in ensuring that workers in Ireland can avail of the same conditions as those in many of our trading partners.
Furthermore, it is important to recognise the range of supports the Government has made available to small businesses in recent years to deal with shocks such as Brexit, Covid-19, supply change disruption and the rising energy costs associated with the war in Ukraine. I welcome the recent announcement by the Minister for Finance to make significant changes to the tax debt warehousing scheme with a reduction in the interest rate applying to warehoused tax debt to 0%.
As already stated, my Department secured more than €257 million for the increased cost of business grant, which will provide targeted refunds to some 143,000 businesses operating from rateable premises, or 95% of all commercially trading businesses nationwide. The ICOB grant will be targeted at small and medium businesses operating directly within premises that are commercially rateable by a local authority.
The Deputy will be aware that my Department and its agencies support SMEs through a number of initiatives. These include providing access to advice, training, mentoring and direct financial grants as well as working to ensure an adequate supply of credit to SMEs through State-backed loan schemes and equity investment schemes.
Enterprise Ireland supports Irish SMEs in the development of global markets through a comprehensive range of supports. The support offered by Enterprise Ireland varies from direct financial assistance through grants, loans and equity investments. Enterprise Ireland also provides market research and export development assistance, as well as funding and mentoring for innovation and research.
The Deputy will also be aware of the ongoing excellent advice and support offered by the local enterprise offices as the first-stop shop for anyone looking for general business advice, including on financial management and business planning.
I chair the SME and entrepreneurship task force along with my colleagues the Ministers of State, Deputies Calleary and Richmond. In recent years their work and efforts have strongly contributed to developments such as the launch of a range of new instruments to improve access to finance and digitalisation and reducing regulatory burden on small businesses through the roll-out of the SME test. In other words, this is a constantly changing marketplace that the Government needs to respond to but we have huge engagement with industry, employers and trade unions. We are constantly adapting policy and putting new financial packages in place to support the businesses that need it and we will continue to do it.
I thank the Minister for his detailed reply. I do not disagree with anything he said. However, we need to focus on certain sectors which he already identified in his response to previous questions, specifically the food and hospitality sector. As I said already, that sector is under acute pressures including as a result of quite a number of Government measures which are incredibly welcome but which in the current climate have placed significant strain on their margins. As the Minister knows, energy prices are increasing and the costs of the goods that they are supplying to their customers are increasing. The costs of being an employer have increased, and that is becoming an issue. I do not think it is as widespread as was portrayed in certain quarters but it is becoming increasingly obvious to me from the number of businesses that have been in touch, that there are constraints in respect of which the Department can provide further support. The Minister already mentioned the grant scheme, which is welcome. Getting it out as quickly as we possibly can is critical to businesses, particularly as we come out of winter.
I thank the Minister for the information he has given to the House. One thing seems certain: time is of the essence. The grave danger to my mind would be the extent to which the local authorities have sufficient staff to meet the extra workload accruing from the welcome measures and the need to touch base with the various local authorities at present to see how they are progressing and if needed to make further provision to enable them to bring the dates forward rather than to fall short of the deadline. What are the prospects of that?
I support what Deputy Durkan said about local authority staff. I recently met a restaurateur who had a turnover of €100,000 over the Christmas period but only made €1,000 profit despite working very hard and running a very efficient business. What is the Minister's view on returning to the 9% VAT rate for restaurants and the hospitality sector?
I hear the concern regarding the hospitality and food sector. I have seen that for myself. We have seen some quite high-profile cafés and restaurants going out of business. Let me set the context. It is important to say this. Considerably more businesses are being set up than are closing down. Last year, five times as many businesses were set up as were lost. That being said, in recent months the Department has looked at the combined cost pressures of policy changes and how they apply to different sectors in the Irish economy. For some sectors they have had virtually no impact on the cost base - it is 1% or 2%. In other sectors it is much higher with a cost increase of 12% or 13%. It is no surprise to hear that food retail is in that space.
The question now is how we can respond to that in a way that is appropriate, does not create demands in other sectors of the economy and does not require us to have a mini budget in the middle of the year. We only had a budget a few months ago and it was a good one. We are working on the appropriate policy response in some of these areas. As I said, the Minister, Deputy Michael McGrath, has already responded in a very helpful way with the change to warehoused tax debt providing significantly more flexibility and reduced cost in how that is managed for businesses. We are now looking at what else we can do on top of that. I think it is important not to create an expectation here that we can have significant tax and expenditure decisions between budgets. That is a difficult ask.
Regarding the lower VAT rate of 9% for hospitality, an argument was made to separate the treatment of bedrooms in hotels, for example, from the sale of food in restaurants and cafés. That proposal proved to be very complex to implement and so we decided not to go with it in the budget last year and those complexities are still there. It is up to Government to look at all of these things in the round. We should not create unrealistic expectations but at the same time we need to recognise that there is a problem. This is a pro-enterprise, pro-business Government. We will look at this with an open mind to see what more we can do to help businesses that are under pressure.
I thank the Minister for that comprehensive response. I recognise his point about a mini budget on the VAT question in response to Deputy Stanton's question. However, we need to try to determine a scheme that identifies those businesses that are struggling versus all of the businesses that the Minister rightly points out are opening up. The economy is buoyant and we are doing extraordinarily well but there are certain constraints, which I cannot help but feel that we, as a Government, have rightly introduced and brought on those businesses in part. That is part of the reason for the issues there. I accept the points the Minister has made particularly about the various measures the Government has introduced to try to support businesses through the recent period in particular.
We all agree with the measures that were introduced in the budget and the measures that are proposed in this grant scheme. However, I do not hear any response to the urgency of the situation. I am a bit concerned about that. It could be a wait-and-see approach. If we wait and see what the potential damage is, it may well be too late. That is what I would ask each of the Ministers to consider as a matter of urgency because there will be things happening in all of our constituencies at this particular time of year when there are many drawdowns on their finances. Businesses will be looking very seriously at their own viability in these circumstances.
I ask the Ministers to consider what else might be possible. The other possibility is that we will lose a large number of small businesses, and, perhaps, some that are not so small.
VAT is the one thing that could make a massive difference for smaller restaurants and for the food sector generally. That is the feedback I am getting. I ask the Minister to work hard to see if that can be split, as he suggested earlier.
I would like to dispel any concerns that we are not looking at this with a sense of urgency. We are. I fought hard around budget time, as did the Ministers of State, Deputies Calleary and Richmond, to make sure we could get as much money as possible for the ICOB scheme. I do not think any Opposition parties called for a fund to help compensate businesses for increased pressures in costs. We put a fund of €250 million in place and increased it by €7 million in order to increase thresholds, etc., to get 143,000 businesses in. It is a big priority for me and the Government to help businesses with cashflow. The Minister, Deputy Michael McGrath, also responded with some urgency in the last number of weeks with Revenue. We are not finished yet. We have done considerable work that has taken months to put together to look at the combined impact on different sectors in the economy of the increased costs they face. We are looking at putting an options paper together for how we might respond. This is being taken very seriously by the Government, but I do not want to raise expectations that we can introduce a mini-budget that would allow us to make a swathe of changes easily. That is not realistic. There are targeted things we can do. The real challenge is how to confine supports to the sectors under pressure in order that there is no moral hazard impact of spending tens of millions of euro in sectors that are not under pressure. That is not easy to do with either the tax system or a grant aid scheme. I assure the Deputy that we are looking at this issue and taking it seriously.
7. Deputy David Stanton asked the Minister for Enterprise, Trade and Employment to outline the number of applications received, approved and rejected under the emergency business flood relief scheme administered by the Red Cross on behalf of his Department; the total spend to date on the scheme; the flexibility with regard to the administration of the scheme; and if he will make a statement on the matter. [5576/24]
It is almost four months to the day since Storm Babet hit Ireland and caused particular devastation in my part of the country, as the Minister well knows. I thank him and his colleagues for visiting and for the support given morally and financially since then. The scheme established by the Department of Enterprise, Trade and Employment for businesses, operated through the Red Cross, has been very successful. I wish to give the Minister an opportunity to tell us how much has been expended on that scheme, how many applications were received and how many have been paid out.
I have two different answers. My explanatory note is better than my speaking notes. I will give the Deputy some of the data because I know that is what he wants. When the initial allocation was approved in October last year, it was impossible to estimate the full extent of the damage caused and the number of businesses impacted by the exceptional weather events in the period around 17 October. The scheme was also extended to cover areas impacted by severe flooding up to and including 5 November in counties Waterford, Limerick, Kilkenny, Galway and Louth. Since the closing date, the Red Cross has reviewed all applications and is now advising that the total estimated payments will be around €11 million including management fees. I sought Government approval to increase the overall allocation for the scheme up to €11 million. It was previously €5.3 million, which the Deputy may recall.
As of Friday, 2 February, 349 applications were received by the Red Cross. Just over €5.2 was paid out between 217 successful applicants. The average payment under the enhanced scheme was €60,000. As of 25 January, just under €4.3 million was paid out to 177 applicants based in County Cork. In the context of the current scheme, there are 349 applicants. Some 140 of these are under the standard flooding scheme whereby people get an initial €5,000 and up to €20,000 following assessment. Some 152 applicants are under scheme B, if you like, in which you can get an initial €10,000 payment and up to €100,000 on assessment. Three applications were withdrawn from the scheme and 54 were not eligible. The current scheme, which closed to applicants on 15 December last, covered weather events in counties Cork, Galway, Louth, Wicklow, Waterford and Wexford. The geographical breakdown of each extension of the scheme of the 349 is as follows: 269 applicants from counties Cork, Waterford, Wicklow and Wexford; 31 from County Louth; and 49 from County Galway.
I thank the Minister for his response. Has consideration been given to setting up an appeals mechanism? In other words, a mechanism whereby a second look can be given to those who were not successful the first time round, for whatever reason. As far as I am aware, most schemes have an in-built appeals mechanism whereby an independent person reviews the application to see if there is something that could be looked at in the event of an appeal. I am not aware of one in this particular case. Perhaps the Minister could consider it.
I also wish to raise the issue of under-insurance. As the Minister said, this was exceptional, devastating and unexpected. The Minister and I have been in business premises where water came up 3 ft or 4 ft and all stock was destroyed. Some of these premises had a lot of Christmas stock. The loss was huge in a small number. Insurance cover was not enough because what happened was so unexpected. Would it be possible to give consideration to helping businesses in cases like that?
As the Deputy knows, in addition to the establishing the Red Cross compensation scheme, we instructed Microfinance Ireland to work with businesses to try to put low-cost loans of up to €25,000 in place to help them from a cashflow point of view. I know that does not necessarily cover some of the questions the Deputy asked but it is worth raising. It is important to say that this is a humanitarian assistance scheme. We have given the Red Cross as much flexibility as we can but there must be qualification criteria. This is not a case of, essentially, the State picking up the tab for businesses that cannot be insured entirely. That would be a dangerous precedent to set and a dangerous signal to send to the insurance industry. We expect it to play its part too.
We know that people in some parts of the country simply cannot get insurance as a result of historical flooding or flood risk. When flooding hits those communities, the Minister, Deputy Humphreys, has to respond from a humanitarian point of view for households, families, etc., and my Department, working with the Red Cross, provides humanitarian assistance for businesses. This is by far the biggest application of that scheme since it was established ten years ago. Eleven million euro is a significant amount of money. The vast majority of applicants are in County Cork. Under the enhanced scheme, the amount businesses can get has increased fivefold. We have to learn lessons and try to improve the scheme if we can. We can look at things like under-insurance but it has to be a case of businesses not being able to get more insurance, as opposed to choosing only to insure stock and relying, potentially, on a Red Cross-type scheme to provide insurance for building premises or whatever. This is not a Red Cross insurance scheme, it is a humanitarian scheme that tries to help businesses get back on their feet.
We could also argue that had the long-delayed flood management been in place when it should have, we would not be having this conversation. I ask the Minister to work hard to try to support his colleagues to get that up and running. The issue is that this was exceptional, unexpected and devastating. Many businesses were insured. In the normal course of events, the insurance cover they had would have sufficed but because this was so out of the ordinary, they were caught out badly. Some had a lot of Christmas stock in place at the time. This was destroyed. I ask the Minister to consider that. It was not a case that they could not get insurance.
They were insured up to the limit that would normally be sufficient. However, this was so out of the ordinary and exceptional that a small number have been caught and may not continue in business.
I also asked a question on the appeals system. Is there an appeals mechanism whereby somebody takes a second look in case a mistake was possibly made? I acknowledge and really welcome the scheme. It is fantastic and the Minister is committed to it. The flexibility shown to date has been really good but there are still lessons to be learned.
The Deputy and I have met businesses that have been particularly badly impacted in Midleton together. If there are other individual schemes we can learn lessons from or if people feel they have been unfairly treated, I would like to hear about them because I would like to talk to the Red Cross about that. The Red Cross has done a great job on the whole. We are very reliant on it. Some have suggested that we should be doing this in-house through some of the agencies, Enterprise Ireland, the local enterprise offices and so on but I believe the Red Cross has, this time round, proven itself to be good at this and I want to continue to build on that relationship. It has been very helpful and responsive but that does not mean we cannot always try to improve. If there are cases of businesses the Deputy feels have been unfairly treated, I would like to hear about them.
There are dangers with an appeals mechanism when an agency like the Red Cross is making decisions on the basis of set criteria and on a humanitarian basis. I do not want to delay payments. I am not giving a definitive "No" to the suggestion but I want to keep this process as simple as possible. This is humanitarian assistance.
10. Deputy David Stanton asked the Minister for Enterprise, Trade and Employment further to Parliamentary Question Nos. 11 and 23 of 29 June 2023, if he is considering bringing forward measures to allow labour market access to the partners and spouses of intra-company transfer employment permits holders, similar to that of partners and spouses of critical skills employment permit holders; and if he will make a statement on the matter. [5575/24]
As the Minister of State is aware, this is an issue I have brought up on a number of occasions, both at committee meetings and here last week during debate on the Employment Permits Bill 2022. It has to do with intra-company transfers and the possibility of the spouses and partners of people who come here working as well. That is possible for the spouses and partners of people who come here through the critical skills permit system. Their spouses and partners can work but that is not the case here. Does the Minister of State agree with this proposal? What can be done to expedite it?
I thank Deputy Stanton for again raising this issue and for consistently doing so constructively and productively over a period. One of the attractions of the critical skills employment permit is that holders of these permits can apply to the Department of Justice for immediate family reunification and, once their partners or spouses are resident in the State, they are eligible to apply to that Department for their own immigration permission, which can give them the right to take up any employment in the State without the need for an employment permit. Spouses or partners of holders of intra-company transfer employment permits do not currently receive automatic work rights on the basis of their spouses' permit and corresponding immigration permission. They are, however, free to apply for a separate employment permit in their own right.
The Department of Justice, which has responsibility for the conditions governing the eligibility requirements for immigration and work permissions for non-EEA nationals and their spouses, is conducting a review of its broader family reunification policy, including the work rights of spouses. The Department of Justice policy requires that sponsors demonstrate their capacity to provide for family members if they are to be granted a permission to come to Ireland. The policy sets out the rationale for applying resource requirements as part of the overall assessment of whether to approve an application for family reunification and the conditions attaching to permissions issued to family members. That work is ongoing at present and my Department has been engaging with the Department of Justice to support this review.
It is worth noting that, last December, we added 43 different occupations to the work permits list. We are proactively seeking people to come to this country to fill very clear skills gaps. More than 31,000 people came from outside the European Economic Area. It is a great shame that, after all of the effort involved in people applying for these work permits, getting accepted and then moving their families over, we then see them leaving those positions. These are often really top-level positions but people are leaving because their spouses or family members cannot work or cannot follow them out on a visa.
A second issue relating to intra-company transfers is consistently raised with all three Ministers by the highest level executives in some of the most important multinationals who see that level of transferability as part of management at that level. When I say we are actively engaging with the Department of Justice, I mean that the Department is making a very clear case as to the need to make these changes so that our work permit system continues to be fit for purpose for everyone, including those undertaking intra-company transfers.
I thank the Minister of State for that. I am aware of some incidences where people refused to come here, despite being badly needed, because their spouses or partners would have been sitting at home all day twiddling their thumbs when they could have also contributed to the economy by working. There is a negative double-whammy there. I welcome the Minister of State's response that his Department is actively in favour of the proposal. It should be quite simple. If somebody has an intra-company transfer work permit, his or her spouse or partner should automatically be allowed to work, as is the case for those with critical skills permits. I do not know why that cannot be done. It is a simple matter and I am told that doing it would not be a great issue. Does the Minister of State have any information as to how many intra-company transfers into Ireland took place last year? In how many instances were spouses able to travel but unable to work?
A couple of hundred intra-company transfers happened last year but, to be frank, that is far fewer than we would have liked because people simply did not apply. In many of the multinational companies who have chosen to locate their European head offices in Ireland or to establish very big footprints here, the management systems require people to spend a year or two in another country to develop their skills. It is a requirement but, unfortunately, if you cannot bring your spouse with you, that requirement makes Ireland a less attractive place for top talent in those companies. We are actively engaging, as I have mentioned, because this is now having a detrimental effect on our economy. The best talent is not coming here under the intra-company transfer work permit system because of the status quo. We have done an awful lot of work to reform our work permit system. Much of it was done by my predecessor, Deputy English. That is feeding into an overall reform whereby the work permit and visa systems will be merged into one. I hope that, when that is achieved, this issue will also be favourably resolved.
With the Employment Permits Bill last week, there was an opportunity to make a legislative change as regards this issue. I understand that Bill is now heading for the Seanad. Would the Minister of State consider bringing forward an amendment in the Seanad to allow this to happen?
That is under active consideration, but I have to underline that the full buy-in of the Department of Justice is required. We are at the Department's mercy as to whether that can be achieved before the Bill passes through the stages in the Seanad.
11. Deputy Catherine Connolly asked the Minister for Enterprise, Trade and Employment if his attention has been brought to a recently published report (details supplied) which outlined that over half of the 50 largest companies in the Irish economy scored 30% or less on corporate uptake of the UN Guiding Principles on Business and Human Rights; and if he will make a statement on the matter. [5479/24]
My question relates to the snapshot of large firms operating in Ireland as regards human rights principles. Some 50 of the largest companies operating in the Irish economy scored 30% or lower. Indeed, five semi-State companies scored less than one out of a possible 24.
I thank the Deputy for raising this issue. I am aware of the recently published report and its findings. Indeed, I had hoped to provide an opening address at the launch of the report but, unfortunately, I was not able to be there on the day. At the launch of the 2020 benchmarking report, I said that the report was a valuable baseline for many Irish companies and that still holds true today. It is vital that we have such benchmarking exercises and reports available to help businesses understand their human rights responsibilities.
While we may not have seen the progress wanted since the publication of the last report, it is quite evident that we are seeing a shift with more businesses wanting to know what they need to do to operate responsibly. These businesses are utilising the United Nations guiding principles and the OECD guidelines for multinational enterprises on responsible business conduct. I am encouraged by the proactive engagement of many businesses but I do recognise that a lot more needs to be done to ensure that a wider base of businesses are increasing their scores.
Voluntary initiatives play a role but the calls for mandatory measures have also been listened to with the EU introducing a number of initiatives, many of which relate to respecting human rights. As we continue to transition into an environment that has a smart mix of voluntary and mandatory measures, we will need to help businesses understand their obligations under the initiatives and ensure we foster an environment that protects human rights.
In that regard, communication is key. That is why my Department created a responsible business forum last year. Key business representative bodies participate in the forum, which discusses the various initiatives with a view to providing coherent, pertinent and timely information to those impacted by the changes from the introduction of mandatory measures and, importantly, to also consider the opportunities.
The Department of Foreign Affairs and my Department are also in the process of developing a second national action plan on business and human rights. The new plan will build on the achievements of the first national plan taking account of the significant developments in the legislative and institutional landscape. As the Deputy will be aware, there is still plenty of work to do in this space.
I thank the Minister for the response and the communication. We need to improve the implementation. We had a plan that was in being, which theoretically was a good plan, but is out of date since 2020 and we are now in 2024. I would like a date for the next plan. I would like clarification on the stakeholders' forum. Has it sat again and if not when will it sit? I would like to know if the plan will be more focused in goals and timelines. Let us look specifically at what Mary Lawlor has said in relation to this. Mary Lawlor the UN special rapporteur calls on Ireland to take a leadership role and calls for mandatory human rights and environmental due diligence. Others have also called for this such as the Irish Coalition for Business and Human Rights. In Ireland the ESB is using coal from north-east Colombia, despite the well-documented human rights abuses associated with the operation of the mine. Airbnb Ireland allows tourism businesses based in Israeli settlements to use its platforms to advertise their services, and so on. I am out of time, but the Minister can see the importance of having a plan and timed dates for implementation.
We have started laying the foundations for completing a public consultation and we held the first stakeholder forum meeting in December last year. These important steps are helping to create a viable pathway forward to create a second plan, which I accept is necessary. The last plan is now out of date. While there is still a lot of good stuff in it we do need to update that plan. We need a second plan and I hope to be able to publish a second plan later this year.
