Alan Farrell (Dublin Fingal, Fine Gael) | Oireachtas source

I welcome the opportunity to discuss this Bill, which will support small- and medium-sized businesses that are the backbone of our economy. It is vital that we protect these enterprises that are faced with factors impacting on their ability to do business, especially when these particular factors are broadly outside their control. The Bill will introduce a €1.2 billion State-backed Ukraine credit guarantee scheme that will provide low-cost working capital of up to €1 million on a six-year term to SMEs, primary producers and small, mid-cap businesses, with no collateral required for loans up to €250,000.

As has been mentioned by almost all speakers, the war in Ukraine has had a major impact on the world market and whole industries. However, SMEs are particularly vulnerable to the uncertainty that this war has given rise to. It is worth noting that the Central Bank has done a body of research on the potential impacts of the war in Ukraine on the Irish economy. This research shows that a prolonged conflict would present a significant risk in addition to that which SMEs have already suffered. We should also be aware of the indirect impact this war will continue to have on Irish businesses. I am thinking specifically of the economic ramifications for our strong trading partners. For example, the German economy has had to deal with a greater level of disruption to its domestic economy due to its previous reliance on the Russian oil and gas network. As Germany is a country with deep trading ties to Ireland, businesses here may lose out. We could also apply that same logic to our friends across the water who, for a number of different reasons, coupled with the inflationary effects of the war in Ukraine, have seen significant impacts to their economy.

The Covid-19 credit guarantee scheme, now elapsed, shows the value of such an intervention and, together with other Government measures, prevented the pandemic from bringing a wave of business closures with it. Similarly, this credit guarantee scheme will send a clear message to the financial markets that businesses here have the support of the Government. That being said, it must be noted there are undoubtedly thousands upon thousands of businesses that will carry forward a lot of warehoused debt, perhaps Revenue debt and other associated debt, from the Covid period, when certain businesses were shut down or curtailed in some way for a sustained period. That is why this particular scheme is imperative. It is necessary for us, however, to look at the broader picture of the impact on small- to medium-sized enterprises, which remain the very largest providers of employment in this country above and beyond any other sector, whether it is foreign direct investment, FDI, or domestic. That is worth noting. The Bill will ensure that a line of credit will be available to SMEs into 2023 and allow them some breathing space to adapt their businesses. As my colleague, Deputy Flaherty, mentioned, however, the speed of deployment of this scheme is imperative. I am absolutely certain that with the prerequisite knowledge that was gained during the Covid years, the Department has become adept, along with other Departments and agencies, in rolling this out, but it is imperative.

Part of this particular scheme has one eye on adaptation as a key principle of the scheme for those who avail of it. They must show that they have an energy efficiency plan in place within their business. On that, I think of a quite simple yet frustrating thing, for instance, in the retail sector, namely, open fridges. We will not get into the nitty-gritty here, but these are an incredibly inefficient way of providing customers with products that need to be chilled. They also cost a fortune to run. Many of the retailers I have spoken to in recent months say open fridges are provided by their suppliers and that, often, position within the store is considered, along with other marketing considerations but, frankly, we can make this problem go away with the stroke of a pen through statutory instrument. We are at that stage, not just as regards the cost of doing business and the cost derived from the energy market, but also from an environmental perspective, as the Acting Chair will know only too well since we serve on the Joint Committee on Environment and Climate Action together. A simple measure that would have a real impact would be simply to rule open fridges out, phase them out and, after a particular date, have no new open fridges permitted and get rid of them over a period. It is something as simple as that. I think of the retailers who undoubtedly sent the Minister of State copies of their bills, as they did me and other Members, showing dramatic increases of 200% to 500%. I saw one bill go from €9,000 to €52,000 for a two-month period. This was a particular retailer who happened to be locked into a very good contract until recently but, when renegotiation came around, was left holding a very different rate for their energy costs, which is debilitating. As I said, many politicians have received copies of these energy bills from retailers, in particular. I welcome their campaign because it is entirely necessary.

That being said, with all the things we have learned during the course of Covid, it became abundantly clear, whether it be through the pandemic unemployment payment, the temporary wage subsidy scheme, TWSS, or other supports, that the Department and the Government are acutely aware of the situation that small- to medium-sized enterprises are in. That is why this scheme and its forebear started quite quickly, once it became apparent that costs were rising so dramatically and that this would force the closure of several businesses. I commend the Minister of State, the Tánaiste and other Departments on the work they have done in supporting small- to medium-sized enterprises in the State. I very much look forward to the passage of this Bill and, more important, the implementation of the scheme as quickly as possible.

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