Gerald Nash (Louth, Labour) | Oireachtas source

I move amendment No. 1:

In page 3, between lines 7 and 8, to insert the following:

“PART 1

PRELIMINARY AND GENERAL

Short title, commencement and collective citation1. (1) This Act may be cited as the Credit Guarantee (Amendment) Act 2015.

(2) This Act shall come into operation on such day or days as the Minister may appoint by order or orders either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes or different provisions.

(3) This Act and the Credit Guarantee Act 2012 may be cited together as the Credit Guarantee Acts 2012 and 2015.”.

On Second Stage of the Bill in November, I indicated I would bring forward some technical amendments on Committee Stage which would improve the drafting and publication of the Bill. The Government also agreed to a proposal by the Minister for Finance that the Departments of Jobs, Enterprise and Innovation and Finance would work together on any necessary additional amendments to the Bill relating to a role for the Strategic Banking Corporation of Ireland, SBCI.

I informed the House it was intended to move Committee Stage amendments to provide for a new section setting out in law the detailed criteria under which the Minister shall calculate premiums, primarily that they should not exceed the level needed to defray or partially defray the costs of the scheme, and clarifications to ensure finance providers meet applicable law in respect of the conduct of their business under the legislation.

These technical amendments were circulated last week and cover premium setting and clarification of the need for finance providers to meet all appropriate legal requirements before being eligible to benefit from the guarantees. These changes will impact on sections 5 and 8 dealing with the power of the Minister to make schemes in consultation with colleagues in the Departments of Finance and Public Expenditure and Reform and his powers to set different premia for different schemes.

In addition I indicated there would be important changes in a new and separate part of the Bill under the following headings. One, provision for State promotion of financial institutions that will in future work with the Minister through this legislation to enhance provision of credit to SMEs and two, a role for the Minister to be able to give counter guarantees intended to enable promotion of financial institutions to unlock matching guarantee facilities from EU sources and share the risk across banks; and the promotion of finance providers, for example, the SBCI, the Minister and a number of potential EU sources. In respect of the latter, it is envisaged this counter guarantee would operate in conjunction with the leveraging of related EU financial instruments in this area, such as the European Programme for Competitiveness of SMEs, COSME, Horizon 2020 funding earmarked for SMEs and the European Fund for Strategic Investment, EFSI, administered by the European Investment Bank and the European Investment Fund - the Juncker plan. In this way Ireland will be able to optimise its return from major EU initiatives.

My Department and the Department of Finance completed work with the Office of the Attorney General on these points and the appropriate revisions were circulated to the House last week. The amendments are, by and large, contained in a new Part 3 of the Bill, sections 9 to 15, inclusive. Arising from the additional part, there are some technical amendments to the earlier parts of the Bill which I will flag as we proceed.

During the debate on Second Stage I stressed that the overarching economic need to ensure Irish firms had the full suite of financial and other supports available to enable them to compete internationally was paramount. The Bill and the additional revisions to it will ensure that in the area of credit guarantees, Ireland will have a framework that will be more than just fit for purpose, covering an extensive suite of products, it will ensure we will have the ability to make best use of the EU funding made available to member states by means of risk-sharing financial instruments. The Bill and the Committee Stage amendments I have outlined, particularly those that will facilitate the leveraging of EU funding, will significantly benefit firms, employees, SMEs and the economy at large.

I flag to the committee my intention to submit three further amendments on Report Stage which will impact on employment rights, the Workplace Relations Act and the Companies Act. They are purely technical in nature and will enable the recently enacted legislation to be fully effective.

As I said, the Bill and the Committee Stage amendments contain major changes to the 2012 Act. One of the proposals is that the original section 1, with its brief definition of the principal Act, be deleted. A Part 1 break is being inserted and the new section 1 will deal with citations and the like, mirroring section 10 of the 2012 Act. The new section 2 will contain the necessary definitions of "Minister" and "Principal Act" which currently are included with other definitions but which are being moved because they apply to all parts of the Bill, with section 1 being deleted.