Dáil Éireann Debate, Wednesday - 7 February 2018
29. Deputy Niall Collins asked the Minister for Business, Enterprise and Innovation the contingencies and supports in place to safeguard Irish 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. [6291/18]
Amharc ar fhreagraI was in London three weeks ago with my colleagues, Deputy Donnelly and Deputy Darragh O'Brien, and we met representatives from the Labour Party, the Conservative Party and from an all-party committee in Westminster. It is fair to say that our take-away was that it is pretty shambolic over there, which is not news to us, but it is against that backdrop I wish again to ask the Minister to outline the contingencies and supports she is putting in place to safeguard Irish SMEs and in particular exporting businesses in view of a potential hard Brexit, which may eventually arise.
I thank the Deputy for raising this matter. Extensive work has been ongoing in my Department to prepare for all Brexit eventualities. This includes both research and the development of specific supports. Officials of my Department have had discussions with senior officials from DG Competition on the potential and the real difficulties encountered by Irish businesses as a result of the UK's decision to leave the EU. In November 2017, the then Tánaiste met Commissioner Vestager and the issue of state aid was discussed. An outcome from this meeting was the establishment of a working group comprising representatives from DG Competition, the Department of Business, Enterprise and Innovation, Enterprise Ireland and the 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 current applicable state aid rules. Should issues arise that require an approach that does not fit within the existing state aid rules, they will be raised as part of the working group discussions. The work of the group has already commenced and it is due to have its third meeting in February 2018. In between these meetings, there has been engagement on specific issues to continue to progress matters.
A rescue and restructuring, R&R, scheme was approved by the Commission in late November 2017. This scheme has been put in place as it was considered prudent to have contingency measures in place so that we can respond swiftly to changing circumstances if necessary.
A Brexit loan scheme was announced in budget 2018. This will provide affordable working capital financing to eligible businesses that are either currently impacted by Brexit, or will be in the future. The recent signing of the counter guarantee means the €23 million Exchequer funding, comprising €14 million from my Department and €9 million from the Department of Agriculture, Food and the Marine, can be leveraged to provide a €300 million fund from the European Commission and the European Investment Band, EIB, Group through its InnovFin loan guarantee scheme. The scheme will be open to businesses of fewer than 500 employees, which can demonstrate that they are significantly exposed to the impact, or potential impact, of Brexit. They must be a viable business, doing business in Ireland, and they must have a business development strategy demonstrating that they plan to innovate or adapt in response to Brexit.
The agencies of my Department are also fully engaged in preparing for Brexit. Enterprise Ireland's, EI, #PrepareforBrexit communications campaign, featuring the Brexit SME scorecard, was launched last March. The scorecard is an interactive online platform which can be used by all Irish companies to self-assess their exposure to Brexit. EI has introduced a Be Prepared Grant which offers up to €5,000 for exporting client companies to conduct further research and use external expertise to develop a Brexit action plan. The funding to local enterprise offices has been increased by 22% and they, with InterTrade Ireland, are offering a range of Brexit focused supports to companies, including those engaged in cross-Border trade with Northern Ireland.
This work, along with market developments as a result of Brexit, and ongoing engagement with the business community, will inform further discussions with the Commission. I will be maintaining a strong focus on the SME sector and will consider the development of further initiatives to support business as required.
We are aware of the Brexit loan scheme and the fact that there was a number of new staff hires within the agencies and that took longer than it should have taken. In addition, the generating of awareness and preparedness of the SME sector has been poor. InterTradeIreland tells us that 19 out of 20 SMEs do not have a plan to deal with Brexit. That really is a shocking statistic, in particular coming from a reputable organisation such as InterTradeIreland.
I wish to focus on the state aid rules. The Minister has outlined the rescue and restructuring scheme. She said that everything she is doing is within the existing state aid rules. What I have asked previously and what I ask again now is whether the Minister cannot lobby and petition DG Competition to change the state aid rules. That was previously done following the collapse in 2008 where the ceiling of €200,000 was raised to €500,000 and that was complemented by an enterprise stabilisation fund. Has the Minister engaged in any attempt to build support for that from her ministerial colleagues across Europe and will she specifically put changing state aid rules on the agenda rather than coming up with new schemes within the existing structure? The business representative organisations such as ISME, the SFA, IBEC and people who represent producers all say they want state aid rules to change to allow for a higher ceiling.
My Department is engaging with officials in DG Competition. They are putting the case forward and outlining the difficulties Brexit will present for businesses in this country.
With regard to the lack of preparedness of businesses, the Deputy is correct. In a survey carried out last year, it was found that 16% of businesses had a plan and that the rest did not. Through Enterprise Ireland, there has been a significant public campaign advising businesses to prepare themselves for Brexit, identify the risks and mitigate against them. There is a €5,000 grant for which Enterprise Ireland clients can apply to assist in examining their risks. As public representatives, we need to encourage businesses to avail themselves of the supports that exist. I am very conscious that businesses need to be ready for Brexit.
I do not mean to minimise the issue but it will require more than a hashtag to prepare for Brexit. Let us not boil it all down to a simple hashtag. As I asked the Minister's predecessor, can she give us a firm commitment today that she will put the changing of state aid rules and increasing the ceiling to a sum in the region of €500,000 on the agenda for the next EU Competitiveness Council meeting? Will she raise it specifically? That is a very straightforward question.
On Brexit, a number of reports were commissioned by the Department and the Minister's predecessor. One was entitled Sectoral Implications Arising from Brexit: Most Exposed Sectors. The Revenue Commissioners published a report that was leaked and on which there was much public commentary. When I previously raised the issue of the first report, I was told an analysis is due to be concluded by the end of the year, that being the end of 2017. All this is against a backdrop of businesses not being properly prepared. In the interest of transparency, informing debate and allowing businesses to prepare themselves, will the Minister publish the reports? Will she give us a commitment that they will be published as soon as possible?
A number of reports are being prepared on the impact of Brexit on businesses and the Irish economy. They will be published in the coming weeks. I have not read the full report yet but it will be published in the next week. Actually, I believe we are publishing it next week.
Regarding the European Union, my officials are speaking continually to EU officials and we are certainly making the case for state aid in the form of supports for Irish businesses that are being affected by Brexit. There is a range of supports, including the Brexit SME scorecard, currently on offer to businesses. A representative of a business rang me two days ago stating it is getting worried about Brexit. I said that was fine as there are plenty of supports available that should be sought. The company did not actually know about them. We need to get the message out. As Brexit approaches, it is beginning to dawn on businesses that they really need to get involved.
