Enda Kenny (Mayo, Fine Gael)
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Question 39: To ask the Tánaiste and Minister for Enterprise, Trade and Employment her views of the provision of export insurance by the State for Irish companies trading abroad; and if she will make a statement on the matter. [44553/09]

Arthur Morgan (Louth, Sinn Fein)
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Question 50: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the composition of the representative group of companies that were engaged by a company (details supplied) in their assessment of credit insurance issues; the size of the companies; the sectors in which they are involved; the markets to which they export; the number of exports insured; the back-up plans that are in place for enterprises if insurance companies fail to provide better levels of cover; if a negligible number of jobs would be supported by a State-supported export credit scheme as claimed by the assessment; and her views on whether this would be more beneficial than putting persons on the live register and leaving indigenous exporters without the opportunity to expand to new markets. [44332/09]

Paul Connaughton Snr (Galway East, Fine Gael)
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Question 73: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if she will establish an Exchequer supported export credit insurance scheme; and if she will make a statement on the matter. [44517/09]

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 74: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the progress made in investigating the merits of a medium-term export credit insurance scheme as part of the forthcoming action plan on trade, investment and tourism; when the plan is due for publication; when the scheme will be introduced; the eligibility criteria that would be attached to the scheme; and if she will make a statement on the matter. [44334/09]

Arthur Morgan (Louth, Sinn Fein)
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Question 87: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if, in view of her decision not to introduce a short-term State-supported credit scheme, she has examined, analysed and investigated other EU countries such as Hungary, Luxembourg, Denmark, Finland, Germany, the Netherlands, and France which have supported the credit insurance market over the past 12 months; the conclusions that were drawn from the investigation; the reason this model will not be applied here; and if she will make a statement on the matter. [44333/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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I propose to take Questions Nos. 39, 50, 73, 74 and 87 together.

As part of the forensic analysis of the Irish credit insurance market I commissioned last July, KPMG consulted both large business groupings and also a range of individual companies which embraced a wide spectrum of business sectors, including the food sector, engineering and plastics. These companies operated in a range of export markets and involved various patterns of exports. This engagement enabled the consultants to get first-hand knowledge of the experience of companies in seeking export credit insurance cover.

The KPMG report established that only a very small level of Irish exports are insured, that the existing cover is heavily concentrated on a single sector and a single market, that total withdrawals of cover are much more prevalent than reductions. It also found that the introduction of a State-backed short-term top-up scheme, where the risk period is less than two years, and where the market is prepared to provide partial cover, would be expensive and of very limited impact, and that a negligible number of jobs would be supported by such an initiative. In addition, it was established there are indications that this market is showing signs of recovery and that insurance companies should therefore begin to provide better levels of cover from now on. Accordingly, based on the overwhelming weight of evidence in the KPMG report, the Government decided that a State-supported scheme of short-term export credit insurance should not be introduced.

It must be appreciated that in these difficult times the Government must assess very carefully whether new proposed schemes and initiatives justify the expenditure involved. In this case, it clearly would not. As the KPMG report established, significant ongoing costs to the State would arise. Annual costs in respect of quite a low level of intervention would be about €1.7 million and this cost would rise to tens of millions of euro if risk profiles shifted upwards.

In any event, the wider issue of credit availability for business is much more significant for business and work is underway to address this, as part of the bank recapitalisation process. In addition, schemes initiated by the Government earlier this year, such as the enterprise stabilisation fund and the employment subsidy scheme, have been established.

With regard to the fact that other EU member states have introduced State-supported schemes, this development was fully considered. Under EU State–aid rules, each such scheme must be approved by the European Commission and such approvals have included a condition that the level of premia to be paid by companies under any such scheme, should be a multiple of regular premium levels. These high premia have made such schemes very expensive for business and, as result, take-up has been less than anticipated. In some cases other restrictive conditions have also been imposed, for example, the destination countries that can be covered. In several countries, including France and the UK, the schemes had to be altered in order to encourage companies to avail of them. Last month the UK Government signalled its intention to discontinue that scheme at the end of this month, because there are now signs of market recovery.

The KPMG report also suggested that we should investigate a possible medium-term intervention. This is very distinct from short-term cover, where the risk period is less than two years. It should be appreciated that most Irish exports do not fall into the medium-term category, which caters more for large projects or infrastructural goods and services, but this may be relevant to some companies. I am considering this option in the context of the action plan for trade, investment and tourism, which is being prepared at present, as recommended in the smart economy strategy. It is not possible at this stage to give an exact date for anticipated completion of this work and the publication of the plan, although significant progress will have been made by the end of the year, with an expected final draft to be presented to the Cabinet Committee on Economic Renewal very early in the new year.

Damien English (Meath West, Fine Gael)
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I am disappointed by the answer but shall stay calm this time. The Tánaiste is dealing with the medium-term companies----

Brendan Howlin (Wexford, Labour)
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The Chair is very impressed.

Damien English (Meath West, Fine Gael)
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Is it open to those companies coming in under the two-year limit, which are unable to achieve export insurance through a banking system and for which the Government will not provide, to come forward if they have a suggestion or a way out to discuss same with a person in the Tánaiste's Department, or with the Revenue? I have come across some cases in which companies are selling to somebody else based in this country who then sells on and does the exporting. However, that has tax implications with regard to the destination countries. As the Tánaiste knows, when the material reaches the foreign country duty will be put on the Irish price. If people are faced with that scenario can they approach Revenue to try to arrange an agreement? If they have other ways around this, in the absence of a Government-backed scheme, is the door open to other ideas and short-term initiatives that might help work through the problem?

Mary Coughlan (Donegal South West, Fianna Fail)
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We are very open to this. An attitude has slipped into this House which I do not like, namely, the notion that just because a person is not in the same party he or she cannot come and talk to Ministers about ideas. It is very important that we share those ideas. If there are issues of personal circumstances we would be more than happy to do what we can. We speak to the Revenue Commissioners to see if we can facilitate people in the context of the overall picture.

The Minister of State, Deputy Conor Lenihan, and I have been discussing the overall trade package with the Minister of State, Deputy Kelleher. I see merit in the context of the medium term where we are looking at export potential in new emerging markets. This is what we are doing. If we are going to have economic recovery and growth it will have to be based on exports. There are risks in certain parts of the country. As long as these are not completely adverse, I feel there is merit in looking at a credit insurance scheme. The short-term measure, namely, €1.7 million means 66 jobs.

The other concern I would have, which I articulated recently to the joint committee, is that only four companies are involved in this insurance. That, in itself, is very restrictive for companies. Equally, until we had these present difficulties, some companies did not realise they were insured and it came as a bit of a shock to them when the cover was taken away.

If the Deputy has a particular issue he should give it to any of us and we will look after it for him.

Arthur Morgan (Louth, Sinn Fein)
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I hope the Tánaiste has a big pot of tea on in her office because I am sure there will be a procession of people.

Mary Coughlan (Donegal South West, Fianna Fail)
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I have good Irish tea bags, a choice of two.

Arthur Morgan (Louth, Sinn Fein)
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Will the Minister give the House any indication as to the composition of the representative group of companies that were engaged by KPMG in its assessment, particularly with regard to the size of those companies and the sectors from which they came? She might provide an outline so that we may be able to understand whether it is a representative group.

The difficulty with taking four or five questions together is that it is difficult for the Minister to reply to them and for us to tease out each one. When is the action plan on trade investment and tourism due for publication? Will the scheme be introduced and what will be the eligibility criteria? I refer to Question No. 74.

Mary Coughlan (Donegal South West, Fianna Fail)
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Question No. 74.

Arthur Morgan (Louth, Sinn Fein)
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If the Minister wants to deal only with the composition of the KPMG group of companies, she may do so. Was it a representative group?

I fully understand that the Minister needs to group similar amendments but it makes it very difficult to tease out individual questions.

Brendan Howlin (Wexford, Labour)
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Yes, there are a number of questions being taken together. I will call the Deputy again.

Mary Coughlan (Donegal South West, Fianna Fail)
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We had a very robust analysis. KPMG was involved with the UK credit insurance scheme so we were using some of its knowledge. We were operating from a different base than the United Kingdom at the time. We carried out a forensic analysis and we have a comprehensive picture of the market. Only 4% of Irish exports are insured. The existing cover is heavily concentrated in one sector, the food sector, and on a single market, the United Kingdom.

There was much consultation and several dozen companies were involved. I met the farmers and representatives of the Irish Exporters Association and a number of the big food companies. Enterprise Ireland was very much involved and used a cohort of its companies. The plastics sector was included also. We had a broad inquiry and we had considerable in-house knowledge on the basis of several meetings I had with many people.

Arthur Morgan (Louth, Sinn Fein)
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It seems the companies were all big. Were there any SMEs at all?

Mary Coughlan (Donegal South West, Fianna Fail)
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SMEs were very much involved also. The SME sector, in itself, is not large in the context of obtaining credit insurance.

I met some of the smaller foreign direct investment people who do not insure themselves but one should note it was some of the raw materials that were being imported that were not being insured. This created some difficulties in itself and we had to meet some people about it. The analysis was very robust because people were considerably and rightly agitated by the issue. It is important to note that only 4% of companies were insuring exports.

Arthur Morgan (Louth, Sinn Fein)
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I am not so sure about that. We are always talking about encouraging SMEs to export and to balance business, yet companies I know that want to do so have no export insurance available to them.

I understand the point the Minister makes on risk but if she is to develop the export market, she will surely agree we need some kind of export cover for companies. If we want them to create jobs and revive the economy, we must realise the bigger opportunities are in the international markets. Does the Minister accept companies are afraid to operate without export insurance and that this matter is worth serious consideration?

Mary Coughlan (Donegal South West, Fianna Fail)
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I do not disagree on the role of the SMEs in the export sector. That is why the plan we have will be international and will focus on our trade opportunities. Tied to it will be the export credit insurance scheme, which will be very complementary.

Another issue raised is equally appropriate for consideration. I was asked whether I would publish the report. I am not in a position to do so on the basis that I and KPMG had to sign a legally binding confidentiality agreement with the insurance companies in order to obtain the information we needed. Unfortunately, the information is not available because of its sensitivity. However, the Deputy can rest assured that I was forensic in my questioning of KPMG in the context of what happened. We have noticed that even the French scheme has not worked very well. The United Kingdom has withdrawn and the operation has turned out to be very expensive. The age of cheap money is gone and there are other methods by which insurance cover can be obtained through the banking sector. I hope the market will come back into force and provide further cover.