Wednesday, 9 October 2019

Ceisteanna (1)

Robert Troy

Ceist:

1. Deputy Robert Troy asked the Minister for Business, Enterprise and Innovation the emergency contingencies and supports in place to safeguard SMEs and export businesses here from a hard Brexit scenario if the UK leaves the EU with no deal in place; if a request will be submitted to Director General for Competition seeking changes to state aid rules in advance of the 31 October 2019 deadline; and if she will make a statement on the matter. [41306/19]

Amharc ar fhreagra

Oral answers (10 contributions) (Ceist ar Business)

I ask the Minister to outline to the House the emergency contingencies and supports in place to safeguard SMEs and export businesses here from a hard Brexit scenario if the UK leaves the EU without a deal, if a request has been made to the Director General for Competition seeking changes to the state aid rules in advance of the 31 October 2019 deadline and if she will make a statement on the matter.

I thank the Deputy for raising this issue. While there remains significant uncertainty around the means by which the UK will leave the EU, the Government has worked to put in place a comprehensive suite of supports for business to suit all Brexit eventualities. The most immediate consequences of a hard Brexit are likely to be currency movements, supply chain constraints, delays, duties and tariffs, all of which will place strain on the working capital position of businesses. The €300 million Brexit loan scheme is designed to address working capital challenges brought about by Brexit. For businesses with fewer than ten employees, loans from Microfinance Ireland will also be available to provide liquidity support.

A rescue and restructuring scheme with a state aid approved ceiling of €200 million is in place to allow us to respond rapidly to provide support for undertakings in difficulty and enterprises experiencing acute liquidity needs, if needed. This scheme was developed as it was considered prudent to have contingency measures in place so that my Department can respond swiftly to changing circumstances, as necessary. These financial supports are operating alongside a suite of advisory, mentoring, training and awareness supports offered by my Department and its agencies. More recently, my Department in association with the Department of Education and Skills, and key industry partners, also launched a new support measure, Clear Customs, comprising a training programme and financial support to help customs agents, intermediaries and affected Irish businesses develop the capacity to deal with the additional customs requirements due to the UK’s departure from the EU.

In relation to state aid, in November 2017, a technical working group was established comprising representatives from DG Competition, my Department, Enterprise Ireland and the Department of Agriculture, Food and the Marine with the objective of scoping and designing schemes to support enterprises impacted by Brexit in line with state aid rules. Through this group my officials are engaging in ongoing and open dialogue with DG Competition on Brexit issues. Earlier this year I met with the European Commissioner for Competition, Margrethe Vestager, who assured me that the Commission stands ready to act urgently in mitigation against the impacts of Brexit on Irish firms. With the deadline for the UK’s withdrawal from the EU fast approaching, the ongoing uncertainty around Brexit continues to represent a significant challenge for businesses in Ireland. I want businesses, particularly those most impacted by Brexit, to know my Department and its agencies are here to help.

I welcome the funding announced yesterday, but as part of that funding, the Minister immediately needs to bring greater clarity to the type of mix of funding that will be granted. What percentage will be equity and what percentage will be loans? That should be done quite quickly. I worry about the schemes because based on the previous schemes, there seems to be a very low uptake. Business groups cite extremely restrictive conditions and limits for the low uptake. We have only a 14% drawdown of the €300 million Brexit loan scheme which the Minister alluded to. She alluded to the supports being put in place by her Department but only 1% of businesses which need to go to customs preparedness workshops have done so.

One of the schemes introduced last year was the Disruptive Technologies Innovation Fund. More than a week ago, I received an email which I forwarded to the Minister. A recipient contacted me in relation to this scheme. The person said that almost a year later they, as a grant recipient, were still completely in the dark regarding this programme and that there was a litany of problems, some of which the person highlighted. While there are schemes, there are problems and there is a low uptake. What is the Minister going to do to reduce these problems and increase the uptake?

I want to reassure the Deputy that there is a range of schemes and that businesses are taking up those schemes. The suite of schemes announced yesterday in the budget have different aspects, being in the form of loans, grants or equity. They will enable Enterprise Ireland to provide a bespoke response to each individual company, depending on its requirements, and companies will be assessed by Enterprise Ireland on a case-by-case basis. The criteria for schemes will be made available to businesses as the Brexit picture becomes clearer. It is important to remember that the supports announced in the budget yesterday are emergency measures, which will only kick in when it becomes clear that there will be a no-deal scenario. The bottom line is that we have a wide suite of supports ready to go in order to cater for companies of all sizes. The first thing a company needs to do is to put a business plan in place. There is support available to help them to do that through Enterprise Ireland and that is available now.

I know a suite of schemes was announced yesterday. I read the Minister's press release and I was in the Dáil Chamber for the budget speech. What I want to know is what element of these proposals will be loans, what will be grants and what will be equity. My reading of the schemes is that, particularly for the smaller businesses, there will be support for microenterprise and for Microfinance Ireland of €5 million and an emergency Brexit fund for microenterprise of €5 million. Both of those are either loans or repayable grants but there are no grants for small businesses that get into trouble. Businesses out there are averse to taking on any more debt and they do not have the capacity to take on any more debt . My understanding is that there was no grant aid for these people in the Minister's announcement yesterday. I seek clarification in that regard.

The Minister talks about her Department providing support for businesses. Why is it that just 1%, or 531, businesses out of more than 90,000 that Revenue identified as having traded with the UK in 2018 have participated in the Brexit customs training? We are not prepared enough. I want to know what the Department is going to do to increase that preparedness.

To clarify, customs training is run by Enterprise Ireland and through the local enterprise offices, LEOs. Much customs training has been carried out and 917 participants have attended customs training. What we have now is "clear customs", which is a much more in-depth training programme for the custom agents, and we also provide a grant of €6,000 per employee, up to ten employees in a company, to help companies recruit staff and train them. There are a lot of supports out there and we are saying to businesses to take up those supports. I will send the Deputy a list of all of the supports that have been taken up as I do not have time to detail them all now.

There has been very poor uptake.

In terms of the microfinance supports that I announced yesterday and the local enterprise supports, €10 million is available and that supports every business across the board.

Is it grants or loans?

It is a mixture of both. Grants are available through the enterprise offices, and some of them are repayable or part-repayable. This is taxpayers' money. If a company needs support, it gets it when it needs it. However, if it turns into profitability, I think it is only fair that it would pay the money back to the taxpayer. There is a suite of supports available to support the companies.