Dáil Éireann Debate, Tuesday - 15 October 2019
310. Deputy Robert Troy asked the Minister for Business, Enterprise and Innovation her views on a proposal by an organisation (details supplied) to introduce a compatible limited amount of aid scheme for investment or working capital for exposed businesses to mitigate a hard Brexit; and if costings have been carried out in this regard of such a scheme. [41669/19]
Amharc ar fhreagraThe Rescue and Restructuring scheme, with a State aid approved ceiling of €200 million, was put in place to allow us to respond rapidly to provide support for "Undertakings in Difficulty" and enterprises experiencing acute liquidity needs. 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.
However, the Scheme is not the first port of call for enterprises seeking support for investment and working capital. Over the last two years, a suite of supports, including this scheme have been put in place by my Department.
The Brexit Loan Scheme was launched in March of 2018. The Scheme, using a combination of Irish Exchequer and EU guarantees, leveraged up to €300 million of lending, at a maximum interest rate 4% and at a cost to the Exchequer of €23 million, €14 million of which was provided by my Department and €9 million provided by Department of Agriculture, Food and the Marine.
The Scheme provides short-term working capital for 1 to 3 years to eligible businesses with up to 499 employees to help them to innovate, change or adapt to mitigate their Brexit challenges. 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 Future Growth Loan Scheme was launched in March of this year. The scheme provides a longer-term facility, 8 to 10 years, of up to €300m to support strategic capital investment at competitive rates with minimum loan amount of €100,000 for SMEs (€50,000 for primary agriculture) and maximum loan amount of €3,000,000. Loans of under €500,000 are being made on an unsecured basis.
This scheme is jointly funded by my Department (€37.2 million) and the Department of Agriculture, Food and the Marine (€24.8 million) at a total cost to the Exchequer of €62 million. This scheme is available to eligible businesses in Ireland and the primary agriculture (farmers) and seafood sectors to support strategic long-term investment.
My colleague, the Minister for Finance, in his Budget 2020 speech on Tuesday, 8th October 2019, announced a contingency fund of €650m, across a number of Government Departments, in the event of a no deal Brexit. On day one of a no deal Brexit, €110m will be made available to my Department for the following:
- €42m for Rescue and Restructuring
- €45m for a new Transition Fund
- €8m Transformation Fund for Food and Non Food businesses
- €5m additional support to Microfinance Ireland, and
- €5m Micro-Enterprise Emergency Brexit Fund.
In addition, I will provide €2m extra to InterTrade Ireland in the event of a no-deal Brexit to support cross-border firms North and South and an extra €3m to Regulatory Bodies of my Department for additional demands in market surveillance, accreditation and conformity.
This is in addition to the funding available under the Brexit Loan Scheme and the Future Growth Loan Scheme and the full range of grant supports available to firms through Enterprise Ireland and the Local Enterprise Offices to prepare now for Brexit through improving their competitiveness and innovation and diversifying markets.
In terms of State Aid, my Department has been working closely with the EU Commission and DG Competition since November 2017 through the Irish-EU Technical Working Group on State Aid. The Group comprises representatives from DG Comp, my Department, the Department of Agriculture, Food and the Marine and Enterprise Ireland. The objective of the Group has been to scope and design schemes to support enterprises impacted by Brexit in line with State Aid rules. This includes exploring all opportunities under EU Regulation No. 1407/2013 (de Minimis Regulation).
Through the mechanism of the Technical Working Group, Ireland has fully utilised the provisions of the State aid framework to enable the investment by Enterprise Ireland of €74 million in Brexit impacted businesses in 2018. Options available through the Agriculture Guidelines are also being developed to support large food companies.
State Aid approval was received in February for capital investment by Enterprise Ireland in an Irish cheese producing company, Carbery Food Ingredients Ltd, to help the company towards financing a €65m diversification project to mitigate the impacts of Brexit.
On 24th January 2019, I met with the European Commissioner for Competition, Margrethe Vestager. The meeting focused on the severe challenges that Irish businesses will face as a result of Brexit and the need for appropriate and timely State supports. It was 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 firm-level implications of Brexit become known. The Commissioner has emphasised that the Commission stands ready to act urgently in mitigation against the impacts of Brexit on Irish firms, and my officials continue to work with DG Competition, as part of the Technical Working Group.
