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Brexit Issues

Dáil Éireann Debate, Tuesday - 29 January 2019

Tuesday, 29 January 2019

Ceisteanna (279, 281)

Eamon Scanlon


279. Deputy Eamon Scanlon asked the Minister for Business, Enterprise and Innovation the degree to which she remains satisfied with infrastructure under the remit of her Department in the case of a no-deal Brexit or hard-Brexit scenario; and if she will make a statement on the matter. [4034/19]

Amharc ar fhreagra

Eamon Scanlon


281. Deputy Eamon Scanlon asked the Minister for Business, Enterprise and Innovation the funding allocated to her Department for Brexit-related matters for a hard Brexit or no-deal scenario; the way in which this funding will be spent; and if she will make a statement on the matter. [4037/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Business)

I propose to take Questions Nos. 279 and 281 together.

Since the June 2016 decision of the United Kingdom to leave the European Union, my Department and its agencies have worked to put a wide range of Brexit supports in place for businesses. The package of Brexit supports encompasses finance, advisory and awareness. My Department's focus is on helping firms to improve their competitiveness and innovation, and to diversify markets.

My Department and its agencies are working to provide extensive supports, schemes and advice to ensure that businesses are prepared for Brexit. The suite of enterprise and finance supports now in place covers the spectrum of potential Brexit impacts and aims to assist businesses in identifying key risk areas and the practical preparatory actions to be taken over the coming weeks.

I made Brexit one of my top priorities in the allocations of funding for 2019 in my Department, and I have allocated further funding to Brexit-related support from agencies and offices of my Department as part of Budget 2019. I have allocated an additional €5 million capital funding to the Local Enterprise Offices, an increase of 22% for 2019, and a further €1 million allocated to InterTradeIreland to help SMEs prepare for the particular North-South challenges associated with Brexit. I have allocated an additional €3 million to Enterprise Ireland and €2 million to IDA Ireland to expand their global footprints and drive the diversification of trade and investment. Additional resources have also been distributed across Science Foundation Ireland, the Health and Safety Authority and the NSAI for 2019 to support enterprises adjust to the new relationships with the UK and pursue new opportunities.

InterTradeIreland, ITI, works with SMEs on an all-Ireland basis and is particularly well-placed, given its remit to develop cross-border trade, to help SMEs prepare for the particular North-South challenges associated with Brexit.

The ITI Brexit Advisory Service provides a focal point for SMEs working to navigate any changes in cross-border trading relationships arising as a result of Brexit. As part of the service, ITI has organised a series of awareness events focused on improving knowledge of customs processes and procedures and identifying actions that can be taken in areas such as logistics and supply chain management. To date, more than 4,000 SMEs have directly engaged with the Brexit Advisory Service.

ITI also offers a Brexit Start to Plan voucher scheme, which enables businesses to get professional advice on how best to plan and prepare for the UK's withdrawal from the European Union. This support helps businesses obtain advice on specific areas such as tariffs, currency management, regulatory and customs issues and movement of labour, goods and services. ITI vouchers are worth up to €2,250 (inclusive of VAT) each. Companies are finding the vouchers very useful and there has been strong demand which can be attributed to the media campaign conducted by ITI across a range of platforms. As of its most recent report and the end of November 2018, 811 businesses have applied for a Brexit Start to Plan voucher, of which 657 have been approved.

The Local Enterprise Offices, LEOs, in the Border Regions are the first-stop-shop for seeking guidance and support on starting or growing a business. The LEOs have organised various events to enable companies to learn about the potential impacts and opportunities of Brexit. In addition, 402 LEO clients have received one-to-one mentoring solely focused on Brexit.

The LEOs engage in a number of other schemes to help companies prepare for Brexit. Technical Assistance Grants for Micro Export are offered as an incentive for LEO clients to explore and develop new market opportunities. Also, additional capital funding of €5 million was announced in Budget 2019 for local enterprise development.

In addition, the six LEOs in the Border region are working together with their Northern Ireland counterparts under the EU Co-Innovate Programme. The aim of Co-Innovate is to give SMEs from the manufacturing and tradable services sectors in the eligible regions the tools and tailored support to help them to innovate, differentiate and compete successfully.

The €300 million Brexit Loan Scheme provides relatively short term working capital, one to three years, to eligible businesses with up to 499 employees to help them innovate, change or adapt to mitigate their Brexit challenges. The scheme is open to eligible businesses from all regions of the country, including those in the Border counties. Businesses can confirm their eligibility with the Strategic Banking Corporation of Ireland, SBCI, and if deemed eligible, can apply to one of the participating finance providers for a loan under the scheme.

The scheme was launched in March 2018 and, as at close of business on 18 January, there have been 376 eligibility applications received, of which 337 eligibility applications have been approved and 65 loans progressed to sanction at Bank level to a value of €14.9 million. Brexit impacted exporters account for almost 50% of approvals, while manufacturing accounts for 38% of approvals and 20% of approved applications relate to investments in new products or markets.

The Future Growth Loan Scheme was announced in Budget 2019. The scheme will provide a longer-term facility, eight to ten years, of up to €300 million to support strategic capital investment for a post-Brexit environment by business at competitive rates. This is jointly funded by the Department of Business, Enterprise and Innovation and the Department of Agriculture, Food and the Marine. Loans of €50,000 to €3 million will be available, with loans of under €500,000 being provided on an unsecured basis. The scheme will be available to eligible Irish businesses, including those in the primary agriculture and seafood sectors, to support strategic, long-term investment in a post-Brexit environment. The SBCI has issued an, “Open Call”, for financial institutions to apply by 11 February 2019 for designation as a lending partner under the Scheme. It is expected that this Scheme will be operational in early 2019.

Enterprise Ireland has established a, "Prepare for Brexit", online portal and communications campaign, as well as an online, “Brexit SME Scorecard”, to help Irish businesses self-asses their exposure to Brexit and a, “Be Prepared Grant”, to support SME clients in planning to mitigate risks arising from Brexit. It has also launched a new Eurozone Strategy to help SMEs broaden their export footprint beyond the UK.

Over 3,700 businesses have used Enterprise Ireland’s Brexit Scorecard to date, and 85% of EI client firms are now taking actions. EI is working closely with regionally-important larger companies in exposed sectors such as food to support strategic investments to build resilience – EI invested €74 million in these businesses in 2018. EI has also hosted 11 Brexit Advisory Clinics.

In addition, eligible EI client companies can respond to the threats and opportunities posed by Brexit by accessing the Agile Innovation Fund. This fund supports clients to quickly develop innovations and respond to opportunities and threats in new and existing markets. The new Fund allows companies to access up to 50% in support of innovation projects with a total cost of up to €300,000. A recent EI survey showed that EI clients that have availed of Innovation Capability, Funding and Collaboration support saw a 67% increase in global sales.

EI also recently launched a new Customs Insights Online course, which is a new online training support to help all businesses understand how customs work including the documentation and process required to operate and succeed post-Brexit. The Customs Insights course explains in clear and simple terms the main customs rules and included the key actions companies can take to prepare for customs after Brexit and the options from Revenue that are available to make the customs process more efficient. This will be available for any company to use whether they are importers or exporters and also whether they are agency clients or not.

The majority of the above schemes are open to all SMEs, not just agency clients. Enterprise Ireland will continue to engage with its clients to ensure they have the supports required to prepare for any kind of Brexit.

In my meeting with Commissioner Vestager on 24 January 2019, we discussed the severe challenges that Irish businesses, especially SMEs, will face when the UK leaves the European Union and the need for appropriate and timely State supports. We agreed that Irish officials will continue to work closely with the Commissioner’s team in addressing any State aid issues that may arise to ensure a rapid and appropriate response as the ultimate shape of Brexit and its firm-level implications become known. The Commissioner emphasised that the Commission stands ready to act urgently in mitigation against the impacts of Brexit on Irish firms.

In addition, in November 2017, the Commission approved a Rescue and Restructuring Scheme for Ireland for Undertakings in Difficulty. Under the scheme, an undertaking is considered to be in difficulty when, without intervention by the State, it will almost certainly be condemned to going out of business in the short or medium term.

This scheme was put in place as it was considered prudent to have contingency measures in place so that my Department can respond swiftly to changing circumstances as necessary. In May 2018, this scheme was extended to include Temporary Restructuring support for those enterprises with acute liquidity needs. To date, no enterprise has sought rescue and restructuring aid for temporary restructuring support.

With Brexit around the corner, I want businesses, particularly those around the Border counties, to know my Department and agencies are here to help. My Department and its agencies are providing extensive supports, schemes and advice to ensure that businesses are prepared for any Brexit scenario.