Richard Bruton (Dublin North Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We did a study of county enterprise boards before we embarked on this change, which was broadly positive but made recommendations for change. We are taking on board the sort of recommendations it made and are integrating them into the new proposal. Some of them are on the sorts of themes Deputy Calleary raised, that is, to ensure innovative companies, which might not be immediately looking to export, do not fall between the crevasses. We recognise that and microfinance is the first instrument which recognised that and expands the range of instruments to support them. We are trying to make it easier to export so we established a firsttime exporters' division and Enterprise Ireland is targeting approximately 2,000 companies which it believes have the potential to export. Obviously, in a very depressed domestic market, exporting is a very important element. To a degree, the LEOs will be the feeder stock to that initiative. We are trying to pick it up on both sides. There will be a broader mandate for the LEOs than now exists.

Deputy Conaghan raised the whole issue of banking which goes back to what Deputy Tóibín raised. Clearly, the refusal rates here are too high but correspondingly, during the boom, the acceptance rates were too high. The pendulum swung from accepting every loan application without scrutiny to a miserly attitude to risk. We need to build the expertise within the banks back up to a point where they can make a quality assessment of bankable projects. We are not interested in them backing projects which are not bankable but we need to get them back into the space of fair assessment of bankable projects. We have a considerable way to go but I see improvements and I think those are reflected in falling refusal rates, which have been reported. Anecdotally, there is more effort in this field but there is a long way to go.

There is also a recognition across Europe that reliance on banks to provide the full response to enterprise needs will not work and that one needs new sources of stronger non-bank finance coming into the field. Over the past 12 months, there has been nearly €2.5 billion in non-bank finance instruments. The National Pensions Reserve Fund now has an equity fund, a restructuring fund and credit fund. Our Department has a development capital fund, the loan guarantee scheme, the microfinance scheme and the innovation fund. We will launch a new tranche of the seed and venture funds. Banks need to get better at doing their business but there is also part of the spectrum which needs to be filled out. We have launched these new instruments but it will be important to monitor them to see if they are fit-for-purpose and are filling the gap. There will be a continuing gap even when the banks are fully functioning. There has been a change and we need to have new financial instruments to support it. It is not just as simple as getting demand and supply back on track. Both sides of the market have changed and we must respond to that.

In regard to Deputy Calleary's other point, Leader companies are separate, are funded by the EU and are working to a different mandate. We will have protocols to ensure there is not duplication and so on. The LEO is a first stop shop rather than a one-stop shop so we are not saying it will deliver Leader supports to Leader or deliver seed capital from Revenue. Someone who goes to a LEO will get easy turnkey access to the delivery of whatever he or she seeks, whether it is a credit review, seed capital tax relief or otherwise. That is the ambition.

We had not considered NERA as a service. Clearly we ought to have a compliance understanding.