Dáil Éireann Debate, Thursday - 24 May 2018
1. Deputy Billy Kelleher asked the Minister for Business, Enterprise and Innovation the contingencies in place to safeguard small and medium enterprises and export businesses from a hard Brexit scenario, including revision of state aid rules; if she is satisfied with the level of resource preparedness; and if she will make a statement on the matter. [22972/18]
Amharc ar fhreagraWhat contingency plans are in place to safeguard small and medium-sized enterprises and export businesses from a hard Brexit scenario, including revision of state aid rules? Is the Minister of State satisfied with the level of resource preparedness and will he make a statement on the matter?
I thank Deputy Kelleher for tabling the question. The Department and its agencies are carrying out extensive work to prepare for all Brexit eventualities. Informed by detailed research, the Department has been putting in place a package of measures that will allow us to respond to the needs of businesses. This includes the recruitment of additional staff to support businesses to adapt to Brexit and the launch of additional supports for market diversification, innovation and competitiveness improvement. I also launched a Brexit working capital loan scheme in April 2018, which will provide affordable working capital financing to eligible businesses that are either currently impacted by Brexit or will be impacted in the future.
My officials are examining policy proposals for a new longer-term business investment loan scheme to support businesses to invest strategically for a post-Brexit environment. I am also developing proposals for a new business finance advisory hub service which would focus on business development.
In terms of helping firms to prepare for Brexit, Enterprise Ireland has launched the Brexit small and medium enterprise, SME, scorecard, an interactive online tool which can be used by all Irish companies to self-assess their exposure to Brexit. Enterprise Ireland is also offering what is known as a "Be Prepared Grant" of up to €5,000 to support clients to develop a Brexit action plan and strategic consultancy grants of up to €35,000. The agency has also rolled out a number of Brexit advisory clinics across the country. The Enterprise Ireland market discovery fund provides support to companies to assist them in researching the viability of exporting into new geographical markets, offering maximum grants of €150,000. The agile innovation fund supports product, service and process innovation to enhance the competitive advantage of Irish companies.
The local enterprise offices are organising workshops, seminars and training to assist companies to better understand the challenges of Brexit and have a range of supports to help clients. Similarly, InterTradeIreland is providing a Brexit start to plan readiness voucher scheme of up to €2,000, which enables companies to purchase specialist advice in areas such as customs, tax, tariff and non-tariff barriers, legal and labour mobility issues.
With regard to state aid considerations, in November 2017, following a meeting with the European Commissioner for Competition with responsibility for EU state aid policy, Ms Margrethe Verstager, we established a technical working group comprising representatives from the Directorate General for Competition and my Department, together with colleagues from 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 state aid rules.
Additional information not given on the floor of the House
An outcome of the technical working group discussions has been the extension of the Irish rescue and restructuring scheme to include temporary restructuring aid for enterprises facing acute liquid needs. This provides a further €10 million of State support to those companies experiencing acute liquidity needs and is in addition to the original €10 million announced in November 2017 under the rescue and restructuring scheme. Under the scheme guidelines, the temporary restructuring element is in the form of loans repayable over a maximum period of 18 months. Restructuring aid under this scheme is in the form of direct grants or equity support.
The Department and agencies will continue to engage with the European Commission over the coming months as the potential impacts of Brexit become clearer.
I thank the Minister of State for his reply. We all accept that the political capital being used by the Government, Parliament and citizens in the context of addressing the border issues on the island of Ireland is of critical importance from a political, cultural, social and economic perspective and all that flows from that. None of us wants any form of border on the island beyond what is currently in place. We must also consider the impact Brexit will have on small and medium-sized businesses. There is no doubt that, irrespective of how the negotiations on Brexit proceed, the United Kingdom will officially leave the customs union, as we know it, and the Single Market on 29 March 2019. If an agreement is not reached, World Trade Organization rules will apply. I am concerned that while the emphasis is on the immediate issue, there is insufficient preparedness not only in terms of resourcing the Department, but also in resourcing the policies the Department should be identifying as key to maintaining and supporting small and medium-sized enterprises that will be dramatically affected by Brexit.
We all share the concerns about what will happen on 29 March 2019. That is why we put many incentives in place to ensure that we will be as Brexit ready as possible. The uncertainty obviously causes many problems for companies, particularly those exporting to the UK. The importance of local enterprise offices, LEOs, must be highlighted. We have resourced agencies and given them extra staff to deal with Brexit. As the Deputy said, meetings organised by Enterprise Ireland have been held all over the country. LEOs are also providing mentoring. Deputy Kelleher will acknowledge that we have put in place incentives for companies to prepare for Brexit. I understand the Deputy received a copy of Building Stronger Business - Getting Brexit ready, a small booklet that outlines the tools available including the clinics, the Be Prepared grant, the Enterprise Ireland, EI, market discovery fund, what LEOs and InterTradeIreland are doing and FDI Brexit support. We are working hard in this area.
It has to be admitted that there are challenges, but there are also opportunities for companies. Until we know what is going to happen – the next few months will be important – uncertainty is affecting many companies. At the same time, the UK market will remain important for SMEs and other Irish companies that export into the UK. We are putting resources in place. These will be additional to the collaboration that already exists with the Department.
We do not want to be argumentative about this. I was in Brussels for the past two days as part of a Fianna Fáil parliamentary delegation to discuss Brexit. We met Commissioner Hogan, the Council and political groupings. There is significant support in Europe for addressing the issue of the Border in the context of the all-island arrangement and the Good Friday Agreement. I am concerned that if the Border issue is addressed, we will have used up all of our political capital and will not have enough - in the context of state aid rules - to get things changed in the future. I urge that the Minister of State, at the next Competitiveness Council meeting, signal that the Government is going to submit an application for the relaxation of the state aid rules in order to allow for higher thresholds to be made available to companies so that they can be prepared in advance of Brexit, rather than trying to make the case after the event.
In regard to state aid considerations, I will be attending a meeting of the Competitiveness Council in Brussels on Monday next. The technical working group involving various players, including the Department, Enterprise Ireland and others, has been very successful. An outcome of the group's discussions has been the extension of the Irish rescue and restructuring scheme to include temporary reconstruction aid for enterprises facing significantly acute needs as regards liquidity. That provided €10 million in state aid to support companies experiencing difficulties, which is in addition to the €10 million announced in November 2017. Under the relevant guidelines, the temporary restructuring element is in the form of loans repayable over a maximum period of 18 months. Restructuring aid under the scheme comes, as the Deputy knows, in the form of direct grants or equity. My Department and the expert group will continue to engage with the European Commission in the coming months as the impact of Brexit becomes clearer. That means longer term loans, etc. We are not reneging on this; rather, we are working hard. I am sure that message was brought home to the Deputy in Brussels during the week.
