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Thursday, 15 Oct 2020

Written Answers Nos. 1-19

Legislative Measures

Ceisteanna (13)

Gino Kenny

Ceist:

13. Deputy Gino Kenny asked the Tánaiste and Minister for Enterprise, Trade and Employment his plans to introduce legislation to allow for a mechanism for workers to be prioritised as creditors in the event of a liquidation in the future; if legislation that stops workers seeking redundancy in certain circumstances will be ended or extended; and if he will make a statement on the matter. [30568/20]

Amharc ar fhreagra

Freagraí scríofa

In a liquidation, a preferential creditor is one whose debts are deemed to be more important than the debts of another creditor. In terms of wage arrears, outstanding holiday pay, and pension scheme contributions, employees are already listed as being preferred creditors.

In relation to redundancy entitlements, it is the responsibility of the employer in the first instance to pay statutory redundancy, as well as other wage related entitlements, to eligible employees. However, the Social Insurance Fund provides a safety net for employees in situations where the employer cannot pay due to financial difficulties or insolvency.

The current law is a result of careful balancing of the various rights of creditors, including employees. Any changes made to the order of those rights will require careful consideration as it will affect the rights of other creditors, many of whom are small businesses or sole traders. The Department is currently considering proposals on the issue of collective agreements in insolvency situations.

On the second issue, Section 12A which is the emergency provision of the Redundancy Payments Act 1967, effectively suspends an employee’s entitlement to claim redundancy from their employer following certain periods of lay-off or short time work due to Covid-19. The Government was concerned that the financial impact of significant redundancy claims at this time, would have a serious impact on the potential for a business and economy to recover which in turn could result in significant insolvency and bankruptcy situations, with further permanent job losses.

The decision to extend this emergency measure to 30th November was a difficult one. I know many employees who have been laid off are experiencing great uncertainty.

A decision has not been made on whether this emergency provision will continue after the 30th November. I recently sought the views of the social partners on this issue.

In its deliberations, the Government will have regard to the social partners’ views, the criteria and principles underpinning the emergency provision and the public health and labour market situations.

Covid-19 Pandemic Supports

Ceisteanna (14)

Gary Gannon

Ceist:

14. Deputy Gary Gannon asked the Tánaiste and Minister for Enterprise, Trade and Employment his plans to support indigenous industries that cannot return due to Covid-19. [25616/20]

Amharc ar fhreagra

Freagraí scríofa

The Government is committed to taking all available actions to ensure we help and assist vulnerable but viable businesses, in particular small and medium enterprises, to deal with the economic impacts of the pandemic. The measures in this week's Budget are in addition to those introduced by the Government as part of the July Stimulus of €7bn of grants and loans for firms of all sizes, which includes the wage subsidy scheme, the restart grant, low-cost loans, write-off of commercial rates and deferred tax liabilities, all of which will help to improve cashflow amongst SMEs.

We are giving companies extra assistance through an enhanced Restart Plus grant of up to €25,000. On foot of the Level 3 restrictions recently introduced, a 30% top-up to the Restart Plus grant is being provided to help those affected through the three-week period. Businesses who have previously benefited from the Restart Grant will be eligible to re-apply for this top-up.

In addition to those available from my own Department, there are also a range of other measures announced in Budget 21 to support enterprise and the SME sector. These include the COVID Restrictions Support Scheme (CRSS) for businesses temporarily closed or who have significantly reduced turnover as a result of public health restrictions; the extension of the Employment Wage Subsidy Scheme; reduced VAT rate for the hospitality and tourism sector; extension of the Commercial Rates waiver and the extension of the tax debt warehousing scheme for employers and self-employed. These are all major elements in the overall package of assistance available for businesses.

I continue to work with my colleagues across Government to assist businesses impacted by COVID-19 to adapt to the changing business landscape.

The recently established SME Growth Taskforce meets for the second time tomorrow and will input to the National Economic Plan next month. The Taskforce and National Economic Plan will look to the future and set out how the Irish economy can best position itself for the twin transition to digital and green.

Covid-19 Pandemic Supports

Ceisteanna (15)

Pearse Doherty

Ceist:

15. Deputy Pearse Doherty asked the Tánaiste and Minister for Enterprise, Trade and Employment the number and value of loans that have been approved to date under the Covid-19 credit guarantee scheme; and if he will make a statement on the matter. [30094/20]

Amharc ar fhreagra

Freagraí scríofa

The COVID-19 Credit Guarantee Scheme was launched by Government on the 7th September and is the biggest ever state-backed loan guarantee in Ireland.

The Scheme provides an 80% State guarantee on lending until the end of this year, for terms between 3 months and five and a half years and offers a range of lending products between €10,000 and €1 million including working capital and term loan facilities. Loans up to €250,000 are unsecured.

This Scheme aims to provide loans to businesses that have been negatively impacted as a result of the outbreak of COVID-19. It provides critical support to ensure businesses are facilitated in having access to credit facilities to assist in their trading needs. It is available to SMEs, small Mid-Caps and farmers.

The new Credit Guarantee Scheme was only launched 4 weeks ago. As of 9th October, 900 business applications have been recommended to the credit departments of the pillar banks for final approval to a value of almost €48m. 400 applications have been approved to date for over €21m: the number of loan facilities drawn almost doubled last week.

These loans are being drawn from all over the country, with businesses which have been deeply hit by the effects of the virus leading the way. The wholesale and retail sector accounted for 22% of loans drawn by value, the accommodation and food services sector accounted for 14% of loans, and the primary agricultural sector accounted for 10% , demonstrating that funding is getting to where it is most needed.

Further loan applications are in the pipeline with decisions yet to be made on those applications.

The Scheme is currently available through Allied Irish Banks, Bank of Ireland and Ulster Bank. In recognition of the need to make this Scheme as widely available as possible, an open-call for new lenders has been completed and proposals are being reviewed by the Strategic Banking Corporation of Ireland. I therefore expect to confirm a number of new lenders will be joining the Scheme in the coming weeks.

It is expected that greater numbers of lenders will increase the accessibility of the Scheme for more businesses and primary producers and help get much needed funding into the market.

Brexit Preparations

Ceisteanna (16)

Rose Conway-Walsh

Ceist:

16. Deputy Rose Conway-Walsh asked the Tánaiste and Minister for Enterprise, Trade and Employment if his Department expects Brexit to have a disproportionate impact on employment and business in rural Ireland; the specific mitigation strategy in place; and if he will make a statement on the matter. [30602/20]

Amharc ar fhreagra

Freagraí scríofa

I want to stress the importance for businesses to act now to get ready for the changes that we know are coming on 1st January 2021 and to make it clear that these changes will happen regardless of the outcome of the negotiations between the EU and the UK on a Free Trade Agreement.

Government is preparing for Brexit preparations through the various Schemes and programmes implemented through our agencies. Recently, I wrote to all 225,000 businesses registered in the State to inform them of the most important actions that they need to take in advance of 1 January and to provide them with a useful Brexit checklist of those actions and contact details of the Government agencies they can contact for help. The Revenue Commissioners have written to over 90,000 businesses that have traded with the UK since 2019 to advise them of the essential customs changes that lie ahead. That letter also included relevant information from the Department of Agriculture, Food and the Marine on exporting animals, plants and products of animal and plant origin.

I launched a €20 million ‘Ready for Customs’ support scheme through my Department’s agency Enterprise Ireland to help businesses prepare for the challenges of trading with and through the UK.

In early September, Government published a Brexit Readiness Action Plan. This readiness work is supported by a major national communications campaign under the ‘Getting Ireland Brexit Ready’ brand.

Regional development is a focus for the Government through the programme of work being undertaken by Enterprise Ireland through the ‘Powering the Regions’ strategy to drive scale and expand the reach of our indigenous enterprise, strengthen regional infrastructure and drive the growth of businesses across Ireland.

The Regional Enterprise Development Fund (REDF) which is administered by Enterprise Ireland was introduced to drive the development and implementation of collaborative and innovative projects that can sustain and add to employment at county, regional and national level.

There have been three calls under the Fund to date and just over €100 million in funding has been approved to 68 projects, with projects approved in every region.

The €28 million Border Enterprise Development Fund (BEDF), is part of an economic stimulus package announced for the six border counties and 11 projects have recently been approved funding totalling over €17 million.

Enterprise Ireland runs an on-line Customs Insights course which is helping businesses to understand the key customs concepts, documentation and processes required to move goods from, to and through the UK. Enterprise Ireland will also launch a Brexit Readiness Checker.

In addition, the Local Enterprise Offices will be carrying out the second phase of their one-to-one successful Brexit mentoring and training workshops called “Prepare Your Business for Customs” workshops and will be supported by a full awareness campaign to target all relevant small Irish businesses together with an online “Countdown Campaign” that will mark every significant day in the lead up to December 31st.

I can assure the Deputy that I will continue to work with my colleagues across Government and with all stakeholders, to assist all businesses impacted by both Brexit and COVID-19.

Departmental Schemes

Ceisteanna (17)

Paul McAuliffe

Ceist:

17. Deputy Paul McAuliffe asked the Tánaiste and Minister for Enterprise, Trade and Employment his plans for allowing taxi drivers and other self-employed persons access more support schemes similar to other SMEs from which they are currently excluded; and if he will make a statement on the matter. [29973/20]

Amharc ar fhreagra

Freagraí scríofa

Budget 2021 is a pro-business and pro-jobs Budget aimed at building on what we put in place in the July Stimulus, to help the self-employed, business owners and employees through this exceptionally difficult time.

As part of Budget 2021, my colleague the Minister for the Environment, Climate and Communications, and Transport Eamon Ryan TD is introducing specific measures for taxi and hackney businesses. The Minister is providing funding to the National Transport Authority to enable it to waive annual vehicle licence renewal fees for 2021.

In addition, as part of Budget 2021 Minister Ryan is allocating €15 million to support up to 750 taxi and hackney drivers in scrapping their older vehicles and replacing them with zero-emission capable electric alternatives. Up to €20,000 will be made available for eligible drivers switching to a new all-electric vehicle and up to €32,500 for those moving to a wheel chair accessible full electric vehicle.

Budget 2021 also provides a significant package of tax and expenditure measures to build the resilience of the economy and to help self-employed and vulnerable but viable businesses across all sectors. We are providing for an extension of the tax warehousing scheme to include repayments of Temporary Wage Subsidy Scheme funds owed by employers and preliminary tax obligations for the adversely affected self-employed.

So as to ensure that all self-employed taxpayers can benefit from the losses provision introduced in the July Stimulus, we are also providing that debt warehousing provisions be extended to include the 2019 balance and 2020 preliminary tax to allow such taxpayers to defer payment for a period of a year with no interest applying.

As part of Budget 2021 the Minister for Finance is also delivering on the commitment in the Programme for Government commitment to equalise the Earned Income Credit with the PAYE credit by raising it by €150 to €1,650.

These measures are in addition to the July Stimulus €7bn package of supports for firms of all sizes, which includes the wage subsidy scheme which we are extending through 2021, the pandemic unemployment payment for the self-employed, grants, low-cost loans, write-off of commercial rates and deferred tax liabilities, all of which will help to improve cashflow amongst self-employed.

COVID-19 Business Loans up to €25,000 are available through Microfinance Ireland with zero repayments and zero interest for the first 6 months and the equivalent of an additional 6 months interest-free subject to certain terms and conditions. The loans can range from €5,000 to €25,000.

My colleague, Heather Humphreys, TD, Minister for Social Protection, recently opened applications for the newly revamped Enterprise Support Grant of up to €1,000 designed to assist self-employed recipients who are exiting the Pandemic Unemployment Payment, as they get back on their feet following COVID-19. This grant is aimed at sole traders such as plumbers, electricians, carpenters, taxi drivers and so on, who do not pay commercial rates and therefore do not qualify for the government’s Restart Grant Plus Scheme.

Taxi drivers in receipt of the PUP can earn up to €480/month and retain their payment.

Foreign Direct Investment

Ceisteanna (18)

Neale Richmond

Ceist:

18. Deputy Neale Richmond asked the Tánaiste and Minister for Enterprise, Trade and Employment the steps taken to attract more foreign direct investment to Ireland post Brexit and to increase existing investment; and if he will make a statement on the matter. [30518/20]

Amharc ar fhreagra

Freagraí scríofa

While COVID-19 is the most significant challenge to our ongoing efforts to sustain and grow foreign direct investment in Ireland, Brexit remains a significant challenge for our economy.

IDA Ireland has been working hard with its client base, over several years, to help mitigate Brexit-related risks that could impact on foreign direct investment in Ireland and to help their clients here respond to any Brexit-related issues they may have. We want overseas firms that already have a presence here to stay well into the future.

In addition, ever since the UK referendum in June 2016, the Agency has been seeking to realise opportunities to attract further Brexit-related investment to Ireland. These efforts have yielded impressive results and the Agency has won over 93 Brexit-related investments with an associated jobs potential of 5,900.

Furthermore, the IDA has taken steps to diversify its source markets for foreign direct investment. The Agency has restructured its European operations to treat the UK as a separate market and will also deploy additional resources in the Middle East, Asia and Latin America. The IDA has also opened a new Toronto office, which reflects the strong growth in investment from Canada.

IDA Ireland continues to emphasise the core elements of Ireland’s value proposition for foreign direct investment. Our strengths – including our pro-enterprise policy environment, highly-educated English-speaking workforce and our membership of the European Union – remain attractive to international investors and IDA Ireland will continue to work closely with international clients, from a range of sectors, to attract job-rich investment from overseas firms.

To enable it to do so, IDA Ireland is well resourced. Additional funding (capital and current) of €42.6m is being provided in Budget 2021. This will assist the Agency in its efforts to attract new job-rich investment that will be an essential part of our economic recovery.

Retaining and strengthening Ireland’s reputation as a first-class destination for foreign direct investment remains fundamentally important to our economic model. I am confident that multinationals will continue to locate or expand further in Ireland in the years ahead.

Question No. 19 answered orally.
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